4. China

Monetary threshold for LF preparation

​ Applicable if related-party transactions exceed any of the following thresholds during the fiscal year:

• RMB 200 million for tangible asset transfer

• RMB 100 million for financial asset transfer

• RMB 100 million for intangible asset transfer

• RMB 40 million for other related-party transactions

  • Reference: Public Notice of the State Administration of Taxation [2016] No.42, Article 13​

Preparation deadline

• By June 30 of the year following the year in which the related-party transactions occurred.

  • Reference: Public Notice of the State Administration of Taxation [2016] No.42, Article 19​

Submission deadline

• Within 3 months of a request by the tax authorities.

  • Reference: Public Notice of the State Administration of Taxation [2016] No.42, Article 20​

Language

• Chinese

  • Reference: Public Notice of the State Administration of Taxation [2016] No.42, Article 21​

Penalty

• A 5% interest surcharge may be imposed in addition to any underpaid tax resulting from a transfer pricing adjustment.

  • Reference: Public Notice of the State Administration of Taxation [2016] No.42, Article 25

  • Reference: Article 122 of the Implementation Regulations of the Enterprise Income Tax Law