Collection

zero Useful+1

zero

Bilateral tax treaty

A tax treaty signed by two sovereign countries to coordinate the tax distribution relationship between them

bilateral tax revenue The agreement refers to the tax coordination between two sovereign countries Distribution relationship Of Tax treaty 。 Bilateral tax treaties are the International tax treaties The main form of. Due to the different political, economic and cultural backgrounds of various countries, especially the great differences in tax systems, it is very difficult for many countries to negotiate and reach an agreement on tax matters for the purpose of safeguarding their respective financial rights and interests, while it is relatively easy for two countries to reach an agreement. At present, most of the tax treaties signed internationally are bilateral agreements. China's tax treaties signed with foreign countries are bilateral tax treaties.

Chinese name: Bilateral tax treaty
Foreign name: Bilateral tax agreement

Definition: tax revenue The agreements are bilateral tax treaties
Agreed time: 1872

catalog

Related Introduction

Announce

edit

According to relevant records, the first bilateral tax treaty in the world was the inheritance agreement between Britain and Sweden in 1872 Inheritance tax Problem reached Specific tax treaties 。

Development expansion

Announce

edit

bilateral tax revenue The agreement is being further expanded. Since the 20th century, the Model Tax Agreement between Taiwan and the Organization and the United Nations Tax treaty Since the birth of the model, bilateral tax treaties have played an important role in the process of international coordination and cooperation of taxation. The conclusion of tax treaties among countries is very active. stay economic globalization In the process, in order to solve the new international tax problems caused by economic globalization, countries will pay more attention to the use of this existing bilateral tax coordination and cooperation model. This is not only reflected in the increasing number of countries that have signed tax treaties and the further expansion of the agreements, but also in the increasingly rich content of the agreements. In the future, the contents of tax treaties will be increased as follows:

1. Add new taxes applicable to the agreement (such as security tax);

2. Apply tax treaty to new business activities (such as business activities);

3. Widely develop new measures to prevent international tax evasion (such as Thin capitalization , Apply tax revenue Agreement);

4. Increase tax administrative assistance (tax collection Tax documents And new tax dispute resolution (such as international tax arbitration).

In addition, bilateral tax agreements signed on a specific issue, such as the agreement on exchange of tax information and the agreement on mutual assistance in tax administration, will be further developed.

Main purpose

Announce

edit

1. Elimination double taxation ；

2. Stable tax revenue Treatment;

3. Properly reduce tax rates and share Tax revenue ；

4. Decrease administration cost , reasonably attributable to profits;

5. Prevent tax evasion;

Common risks

Announce

edit

Bilateral tax treaty

Common to multinational enterprises Tax treaty The risk is the risk of permanent establishment. Platinum Strategy Consulting Linked-F members generally responded that according to the tax treaties signed between China and other countries, if the headquarters of multinational enterprises send management personnel to China management It can be determined as a labor oriented permanent establishment according to the terms of the permanent establishment agreement, so that multinational enterprises will have non residential areas corporate income tax Tax liability and corresponding individual income tax Risk.

"Whether the dispatched personnel constitute an institution or a permanent establishment, the first thing to do is to determine the nature through basic factors. In short, it is to determine who the dispatched personnel work for." Senior consultant of Brilliant Consulting Chen Dong Mr. Li summarized and conveyed the opinions of the State Administration of Taxation, "if the tax authorities can directly judge from the information submitted by the enterprises that the relevant risks of expatriates are borne by domestic companies, and performance appraisal If the main body of the company is also a domestic company, it can be directly determined that the expatriate works for a domestic company, so it does not constitute a permanent establishment; Since the management service fee paid overseas is recognized as a permanent establishment, it bears a high Tax burden Of. However, if the management service fee has nothing to do with the dispatch, it will not lead to the determination of the permanent establishment in principle.^[1]

primary coverage

Announce

edit

OECD and the United Nations These two international characteristics tax revenue The model agreement is a summary of the practice of countries around the world in dealing with mutual tax relations. Their emergence marks International tax relations The adjustment has entered a mature stage. These two templates mainly include the following basic contents:

jurisdictional principle

The two models both recognize the principle of giving priority to the jurisdiction of income sources in terms of guiding ideology, that is, from the source Taxation principle , by taxpayer Adopted by the country of residence of duty-free Or credit to avoid International double taxation 。 But there are also important differences between the two models: the UN model emphasizes the source of income Taxation principle , reflect separately developed country and developing country Interests of; oecd model More requirements are put on the principle of restricting the source of income. The scope of application of the two models to the agreement is basically the same, mainly including the provisions on the scope of application of taxpayers and tax categories.

Permanent establishment

Both models have agreed on the meaning of permanent establishment. A permanent establishment refers to a fixed place where an enterprise conducts all or part of its business activities, including three main points: first, there is a business place, namely Enterprise investment , such as houses, sites or machinery and equipment. Second, the site must be fixed, that is, a certain location has been established and has a certain permanence. Third, enterprises conduct business activities through the site, which is usually carried out by the company's personnel in the country where the fixed site is located economic activity 。 The purpose of clarifying the meaning of a permanent establishment is to determine the profit of one Contracting State to the enterprise of the other Contracting State Right to tax 。 The scope of permanent establishment is determined, which is directly related to the relationship between the country of residence and the country of source of income tax revenue The amount of distribution. The OECD model tends to narrow the scope of permanent institutions to facilitate developed country Taxation; The UN model tends to broaden the scope of permanent institutions to facilitate developing country 。

Tax rate limitation

yes dividend , interest Royalties Collection of investment income Withholding tax The common practice of "tax rate" is to limit the tax rate of the source country of income, so that both contracting parties can collect taxes and exclude the tax rate of either party tax revenue Exclusive rights. There are obvious differences between the two models in terms of the limited range of tax rates. The OECD model requires a very low tax rate, so that the source country of income will levy less withholding tax, and the country of residence can levy more tax after giving credit. The United Nations Model does not follow this provision, and the limited rate of withholding tax shall be determined by the contracting parties through negotiation.

Tax treatment

Both the OECD model and the UN model advocate the principle of equality and mutual benefit. One Contracting State shall ensure that nationals of the other Party enjoy the same tax revenue Treatment. The specific contents are as follows:

No international difference. That is, the tax treatment given to taxpayers in the same or similar circumstances cannot be different because of their different nationalities.

There is no difference in permanent establishment. That is, the permanent establishment in the other country tax burden It should not be heavier than similar domestic enterprises. There is no difference in payment deduction. That is, during calculation Enterprise profit The interest paid by the enterprise Royalties Or other payments, if recognized as deductible expenses, shall not be treated differently because the payment object is a resident of the home country or a resident of the other country.

No difference in capital. That is, the capital of an enterprise of a Contracting State, whether wholly or partly, directly or indirectly owned or controlled by a resident of the other Contracting State, shall not have a tax burden or related conditions different from or heavier than those of similar enterprises of a Contracting State.

Tax evasion

Avoiding international tax evasion is international tax revenue One of the main contents of the agreement. The measures taken by the two models in this regard mainly include:

1. Information exchange

It is divided into daily information exchange and special information exchange. Daily information exchange refers to the regular exchange of relevant information Transnational taxpayer Information on income and economic transactions. Through this exchange of information, all contracting parties can understand the changes in income and economic exchanges of transnational taxpayers, so as to correctly assess taxable income. Special information exchange means that one party of the contracting party puts forward the contents that need to be investigated and verified, and the other party helps to verify.

2、 transfer pricing

In order to prevent and restrict international legality tax avoidance The contracting parties must cooperate closely and determine in the agreement Transfer pricing method To avoid taxpayer Transferring profits and evading taxes in the form of price.

Implemented in China

Announce

edit

Seminar on bilateral tax treaties held by Boluo Consulting

bilateral tax revenue The agreement is an important legal basis for China's foreign-related tax collection and management Tax treaty The implementation of the tax treaty mainly involves the identification of the resident status of both contracting states and the application for preferential treatment under the tax treaty.

According to China Foreign related tax law According to the regulations of the People's Republic of China dividend , interest and Royalties ）Can apply for preferential treatment under the tax treaty. Therefore, China tax authority First, it must be determined whether the taxpayer is a resident of the other Contracting State. In the practice of foreign-related tax law, the following principles can be followed:

1、 foreign juridical person Identification of resident status.

For companies and enterprises related Other economic organizations The tax authority can temporarily use it to judge whether it is a legal person resident of the other country tax registration The head office or Actual management organization And handling Industrial and commercial registration The legal person qualification certificate (copy) issued by the relevant authority of the country where the enterprise is located shall be used for judgment. Those who cannot provide valid proof shall not enjoy tax revenue Agreed preferential treatment.

2. Foreign countries natural person Determination of resident status.

The tax authorities of our country can deal with whether foreign personnel engaged in work or providing labor services in China are residents of the other contracting country according to different situations:

First, the taxpayer shall report his domicile or residence in the other country, his employment or business, and his tax liability, and submit his own identity certificate, passport, and certification materials issued by the company (enterprise) that sent him to China. Tax can be temporarily recognized, and then selected and focused verification can be carried out according to the specific situation.

Second, for individual cases that are unclear, or come from a third country or are themselves third country people, tax authority There is no way to judge, and the taxpayer And ask for enjoyment tax revenue If they have agreed on treatment, they must be required to provide proof materials issued by the tax authorities of the country where they are located that they are liable to pay taxes to residents. Those who cannot provide evidence shall not enjoy the preferential treatment of tax treaties.

Third, for individuals who are residents of both Contracting States at the same time, when both Contracting States are required to tax the individual's income at home and abroad, the individual shall submit the details of his occupation, residence or residence, and his tax liability in the other country to the tax authorities, so that the tax authorities of both Contracting States can settle the matter through consultation according to the provisions.

Dividends, interest and Royalties And other investment income, which needs to be applied for Tax treaty benefits In case of treatment, it is required to fill in the enjoyment when submitting the resident certificate issued by the local tax authority Tax treaty treatment The application form of tax authority After confirmation, they can enjoy preferential treatment of tax treaty. Otherwise, the tax authority has the right to collect the tax at the tax rate specified in the tax law of our country, and allow the tax authority to review and return the overpayment after completing the certificate and filling in the application form Taxes 。 Enjoy by foreign residents tax revenue The application form for negotiated treatment can be obtained from the tax authorities Beneficial owner It shall be filled out in Chinese and English, in duplicate, and submitted to the payer together with the resident identity certificate, and then submitted to the tax authority by the payer. After examination and verification by the tax authority, a copy shall be returned to the payer for implementation.

When Chinese residents (including individuals, companies or groups) obtain investment income from the territory of the other contracting country and apply for tax treaty treatment in that country, the Chinese tax authorities (tax authorities at the county, city and above levels) shall provide taxpayer Chinese resident identity certificate. The Chinese tax authorities have formulated a unified format, and the tax authorities of the place where the resident is located can sign and issue the certification documents. The certificate shall be in duplicate, and one copy shall be given to the Chinese resident to enjoy in the other Contracting State tax revenue The procedures for the agreement of treatment, one copy of which shall be submitted by the local tax authority Keep files for future reference.

Agreed tax rate

Announce

edit

tax rate	Agreements with the following countries (regions)
0%	Georgia (Directly own at least 50% of the shares of the dividend paying company and invest 2 million yuan in the company euro In case of)
5%	Kuwait Mongolia, Mauritius Slovenia 、 Jamaica 、 Yugoslavia 、 Sudan , Laos, South Africa Croatia 、 Macedonia 、 Seychelles 、 Barbados 、 Oman 、 Bahrain Saudi Arabia
5% (in case of direct ownership of at least 10% shares of dividend paying company)	Venezuela 、 Georgia (and invested 100000 yuan in the company euro ）(The tax rate is 10% when the shares of the dividend paying company are directly owned under 10% according to the agreement with the above countries)
5% (in case of direct ownership of at least 25% shares of dividend paying company)	Luxembourg , South Korea, Ukraine Armenia 、 Iceland , Lithuania Latvia , Estonia Ireland Moldova, Cuba, Trinidad and Tobago, Hong Kong and Singapore (the tax rate is 10% when the shares directly owned by the dividend paying company are less than 25% according to the agreement with the above countries (regions))
7%	The United Arab Emirates
7% (in case of direct ownership of at least 25% shares of dividend paying company)	Austria (The tax rate is 10% when the shares directly owned by the dividend paying company are less than 25%)
8%	Egypt Tunisia Mexico
10%	Japan, the United States, France, the United Kingdom, Belgium, Germany, Malaysia, Denmark, Finland, Sweden, Italy, the Netherlands Czech Republic Poland, Bulgaria, Pakistan, Switzerland, Cyprus, Spain, Romania, Austria, Hungary Malta , Russia, India Belarus , Israel, Vietnam, Turkey Uzbekistan 、 Portugal Bangladesh, Kazakhstan, Indonesia, Iran, Kyrgyzstan, Sri Lanka Albania , Azerbaijan Morocco Macao
10% (in case of direct ownership of at least 10% shares of dividend paying company)	Canada and the Philippines (the tax rate is 15% when the shares directly owned by the dividend paying company are less than 10% according to the agreement with the above countries)
15%	Norway, New Zealand, Brazil, Papua New Guinea
15% (in case of direct ownership of at least 25% shares of dividend paying company)	Thailand (the tax rate is 20% when the shares directly owned by the dividend paying company are less than 25%)

Example analysis

Announce

edit

Q: Domestic enterprises pay to Hong Kong Profit distribution Withholding Whether income tax can be enjoyed Tax treaty treatment ？ What information needs to be provided? Are there any other preferential policies and what is the income tax rate?

Answer: According to the relevant provisions of the Enterprise Income Tax Law and the Regulations on the Implementation of the Enterprise Income Tax Law, there is no organization or place in China, or although there is an organization or place, there is no actual connection between the income obtained and the organization or place Non resident enterprises , the applicable tax rate is 20%, and the tax rate is 10% corporate income tax 。 At the same time, if the non resident who has tax liability in China is from a country that has concluded a tax treaty with China Tax treaty Countries can apply for tax treaty treatment. If a non resident enterprise in a country that has concluded a tax treaty with China derives income from dividends, bonuses, interest and other sources in China, and the restricted tax rate specified in the relevant tax treaty is less than 10%, it can enjoy Agreed tax rate 。 If the tax rate stipulated in the tax treaty is higher than the tax rate stipulated in China's domestic tax laws, the taxpayer can still pay taxes according to China's domestic tax laws.

The preferential policies that may also be applicable to the situations complained by the above Hong Kong companies include the provisions on dividends in Item 2 of Article 10 of the Arrangement between the Mainland and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Tax Evasion on Income. 1. The shares paid by a resident company of one party to a resident company of the other party may be taxed in the other party. 2. However, these dividends can also be taxed according to the laws of the party where the company paying the dividends is a resident. However, if the dividend Beneficial owner As a resident of the other party, the tax shall not exceed 5% of the total dividend if the beneficial owner directly owns at least 25% of the shares of the dividend paying company. In other cases, 10% of the total dividend. However, the preconditions are as follows: 1. The company in Hong Kong is a resident company in Hong Kong. 2. The beneficial owner of the dividend paid by the company is the Hong Kong company. 3. The Hong Kong company accounts for more than 25% of the company at any time within 12 consecutive months before obtaining dividends Shareholders' equity And voting shares. And apply for reduction or exemption in accordance with the relevant provisions of the document. An enterprise applying for tax treaty (arrangement) treatment shall comply with the relevant provisions of the Notice of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Non residents to Enjoy Tax Treaty Treatment (for Trial Implementation) (Guo Shui Fa [2009] No. 124).

Novice on the road

Growth task Getting Started with Editing Edit Rule Edit by myself

I have questions

Content query Online Service Official post bar Feedback

Complaints and suggestions

Report bad information Failed to appeal through entries Complaint of infringement information Blocking query and unblocking

Jinggong Network Anbei No. 1100000200001