Selected China tax disputes
Posted by Shi Zhiqun on January 28, 2010 under Tax Controversy | 
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Here are some selected recent tax disputes in China.
- Guangxi Jiayuan Real Estate Company fined RMB 1.44 million for failure to declare income from sale of shares – In a very simple case of tax avoidance the taxpayer failed to disclose its income from an equity transfer and accordingly was required to pay the full amount of tax on RMB 1.51 million plus a late fee surcharge of RMB 430,000 in addition to the above penalty.
- Fujian foreign invested enterprise receives transfer pricing adjustment – In a case decided late last year in Fujian, the local authorities investigated a FIE’s transfer pricing practices over a 6 year period. In reliance on the new anti-avoidance provision in the Enterprise Income Tax Law, the authorities re-adjusted the taxable income of the company and increased it by RMB272.9 million. Reports indicate that the company was relatively content with the result, suggesting that it’s potential exposure was significantly higher. The fine was the result of a negotiated settlement between the authorities and the taxpayer.
- VAT Invoice forger sentenced to 15 years in prison – Ye Mou Biao has been sentenced to 15 years in prison by the Zhuhai Intermediate People’s Court and fined RMB500,000 after creating RMB400 million worth of fake VAT invoices. Ye Mou Biao’s conduct resulted in a loss of tax revenue in the amount of RMB12.463 million
