Taxation on International Secondment
2013-August-14 Source:
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On April 19, 2013, Announcement of the State Administration of Taxation on Issues Concerning Enterprise Income Tax on Labor Services Provided in China by Personnel Dispatched by Non-resident Enterprises ([2013] No. 19, “Announcement”) was issued. It makes specification on the tax issues when it comes to international secondment.

The core of taxation on international secondment is to classify the nature of the employment of the dispatched personnel. The dispatched personnel is employed by foreign dispatching organization and performs his duty for the branch in China, there is no clear boundary between he is employed by non-resident company or working for a resident branch, which stirs ambiguity to the tax bureau and the enterprises. In order to draw a line, the Announcement specifies that if the dispatching enterprise assumes part or all of the responsibilities and risks relating to the outcome of the dispatched personnel’s performance and assesses his performance, it shall be deemed that the dispatching enterprise has provided the labor services in its establishment or premises in China. In addition, the Announcement provides the procedure for tax declaration, the determination of tax rate for non-resident enterprise, payment for dispatching enterprise, issuance of tax proof and other issues.

(This information is provided by Lawyer Kelly Xie from Guangdong KaiTong Law Firm in friendship. It is not any legal opinion or legal grounds addressed to any organization or individual. For inquiry, please contact Kelly via email at or by phone on 13926185641.)

Editor: Olivia
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