Provisional Measure for China Citizen (National) to Apply for Activating Tax Negotiation System

The State Administrative of Taxation
Sui Fa [2005] No. 115
07 July 2005

To apply for activating the tax negotiation system means that when a China Citizen (National) thinks that the measure adopted by the contract counterpart does not come up to the stipulated regulations of tax agreement, he/she can request the State Administrative of Taxation (SAT) to negotiate with the contract counterpart to solve the taxation problem.

China Citizen refers to enterprises or individuals who are liable to China tax based on his/her income generated from inside and outside China.

China Citizen also refers to individual with Chinese nationality, Corporation set up in China and Organization registered in China.

China Citizen can apply to activate tax negotiation system when they encounter one of the followings:
a) Need to apply for bi-lateral advanced pricing arrangement;
b) Taxation on the profit generated from transaction between affiliated enterprises that may or have caused double taxation problem;
c) Hold a dissenting view on tax rate of dividend, interest and patent fee;
d) Violation of Indiscrimination Treatment Article that may or have caused discrimination;
e) Hold a dissenting view on the identification of permanent establishment and citizenship, and the profit calculating of permanent establishment;
f) Dispute arises from interpretation and execution of tax agreement that cannot be solved by one's own accord; and
g) Double taxation arises.

China citizens can apply for the tax negotiation if he/she thinks that the contract counterpart has violated the tax agreement of Indiscrimination Treatment and caused discrimination.

This measure will be taken into effect from 01 July 2005.

申請啟動相互協商程式，是指中國居民（國民）認為，締約對方所採取的措施，已經或將會導致不符合稅收協定所規定的徵稅行為，向國家稅務總局(以下簡稱總局)提出申請,請求總局與締約對方主管當局通過相互協商解決有關問題。

中國居民是指就來源於中國境內、境外的所得負有中國納稅義務的企業或個人。

中國國民是指具有中國國籍的個人、中國法人和中國非法人團體。

一、 中國居民遇有下列情況之一的,可以申請啟動相互協商程式：
a) 需申請雙邊預約定價安排的；
b) 對聯屬企業間業務往來利潤調整徵稅,可能或已經導致不同稅收管轄權之間重復徵稅的；
c) 對股息、利息、特許權使用費等的徵稅和適用稅率存有異議的;
d) 違背了稅收協定無差別待遇條款的規定，可能或已經形成歧視待遇的;
e) 對常設機構和居民身份的認定，以及常設機構的利潤歸屬和費用扣除存有異議的；
f) 在稅收協定的理解和執行上出現了爭議而不能自行解決的其他問題；
g) 其他可能或已經形成不同稅收管轄權之間重復徵稅的。

二、 中國國民認為締約對方違背了稅收協定無差別待遇條款的規定，對其可能 或已經形成歧視待遇時，可以申請啟動相互協商程式。

本辦法從2005年7月1日開始執行。