Do the Chinese tax authorities challenge tax-planning arrangements retroactively?
The tax authorities are allowed to reassess the tax liability of a taxpayer up to three years due to miscalculation. If the tax authorities are responsible for the miscalculation, no fine on the interest shall be charged. Generally, if the amount miscalculated exceeds RMB 100,000 the retroactivity period increases to ten years. In case of tax evasion on the part of the taxpayer, the tax authorities can retroactively make a taxpayer liable without any time limits.