Transfer Pricing Solutions

China is developing increasingly complicated tax rules. In the past year, China promulgated the new Enterprise Income Tax Law (“EIT Law”) which is applicable for all corporations in China and those with related operations outside of China. Particularly Articles 44 and 47 of the EIT Law give the tax authorities wide discretion to re-write transactions and assess the appropriate income levels for companies which engage in related party transactions. Further, with the increasing transparency and closer working relationship with Hong Kong (where many FIEs have Special Purpose Vehicles), foreign companies must be even more careful to ensure that their transactions comply with Chinese laws.  

LEHMAN, LEE & XU provides services to clients in a unique manner. In addition to our Chinese lawyers, we employ both Chinese and foreign CPAs, and attorneys, which work together to ensure that the client is obtaining comprehensive solutions for their tax-minimization plans.

LEHMAN, LEE & XU is able to offer clients comprehensive transfer pricing solutions relating to both China and international matters, including:

• Transfer pricing proposals and plan
• Assessment of transfer pricing risks and opportunity assessment
• Advance pricing agreement: we can work with government authorities to get advance approval for pricing arrangements between your related companies. This will ensure that your risks of review will be minimized.
• China profit allocation: for holding or group companies in China, ensure that your profits or business incomes are appropriately allocated so as to ensure tax-minimization.
• Defence documentation: we work with client’s to prepare documentation to help it support its pricing arrangements between companies
• Cost sharing agreements (CSAs): we work closely with various China and offshore MNC companies, and tax authorities to share costs and risks of development of intangibles in relation to the agreed risk and return.  
• Additional contracts: in addition to transfer pricing agreements, there are a number of other ways to legally reduce taxable income in China. We review clients' strategies and provide alternatives.

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