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Global Tax Summit 2014: Interview with: Rose Zhou, Head of Tax Services - Shanghai, Grant Thornton
Global Tax Summit 2014: Interview with: Rose Zhou, Head of Tax Services - Shanghai, Grant Thornton
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Global Tax Summit 2014: Interview with: Rose Zhou, Head of Tax Services - Shanghai, Grant Thornton


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Global Tax Summit 2014: Interview with: Rose Zhou, Head of Tax Services - Shanghai, Grant Thornton

Global Tax Summit 2014: Interview with: Rose Zhou, Head of Tax Services - Shanghai, Grant Thornton

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  • 1. Doing Business in China What Tax Officers Need to Know laws as they see fit. One location’s experience cannot be applied to another location. How aggressive is the audit environment in China? How does it impact the tax function of multinationals? Interview with: Rose Zhou, Head of Tax Services - Shanghai, Grant Thornton “China has its own transfer pricing regulations, with characteristics that differ between provinces,” pointed out Rose Zhou, Head of Tax Services Shanghai, Grant Thornton. “Tax Officers must be aware of how different provinces interpret and practice the laws, in order to avoid hefty penalties,” she added. Grant Thornton is attending the upcoming marcus evans Global Tax Summit 2014, taking place in Monte Carlo, 19 - 20 May. What do multinational companies doing business in China need to know about its transfer pricing laws? What local knowledge is required? They need to understand that although China follows the OECD principles, its transfer pricing regulations are different from international standards. For example, common capital intensity adjustments are not encouraged in China, if not discouraged, so there are differences in how those regulations are applied. As one country, the Chinese government can only issue one regulation. However, as provinces differ in population size and level of economic development, the regulations are quite general. This leaves room for local authorities to interpret and practice the Where is the Chinese economy headed? What should multinational companies plan for? The Chinese economy will continue to grow, although perhaps not as fast as before. Considering the size of its population, the market for consumer goods will be especially prosperous. China is ranked in the top three of the most aggressive regions for transfer pricing practice. The environment is quite harsh, so managing transfer pricing risk is critical. Many entities have compliance requirements. If they fail to comply, they will be subject to penalties, may be audited and some transfer pricing adjustments will occur. However, we also encourage companies that do not have these obligations to properly plan and manage transfer pricing risk. Transfer pricing is everywhere! Whether they do cash repatriation, business restructuring or set a new policy to drive opportunities in a tax model, they will find it important to have the right transfer price set. Otherwise, the new model will not achieve its objectives and they will eventually face a transfer pricing audit. Does compliance mean more tax? How could companies minimise their tax burden? To a certain extent, full compliance may lead to more tax. The company needs to ensure it is doing the right thing even for the grey areas. However, compliance also means less risk and fewer penalties, thus saving the company money. Companies may pay a bit more but it is due tax that is supposed to be paid. Additionally, they avoid penalties, trouble and potential adjustments. C o m p anie s ne e d to f ollo w the regulations, how they change, plan ahead and have the right internal team to support business activities. That is the best way compliance. of achieving What they should pay attention to are changes in tax regulations. In the past, tax benefits were granted to companies located in certain places, depending on where the government wanted to guide investments to. Then benefits were granted to certain types of entities, such as those with very advanced technologies. The Chinese government guides the economy through the invisible hand of taxation. This means Tax Officers need to read between the lines, identify what the government is encouraging or discouraging, and move their company to the right track. The Chinese government guides the economy through the invisible hand of taxation
  • 2. The F i nan ce marcus evans N etw o rk – Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations. About the Global Tax Summit 2014 This unique forum will take place at Le Méridien Beach Plaza Monte Carlo, Europe, 19 - 20 May 2014. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. Contact Please note that the Summit is a closed number business of event and participants the strictly limited. Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division Tel: Email: + 357 22 849 313 For more information please send an email to All rights reserved. The above content may be republished or reproduced. Kindly inform us by sending an email to About Grant Thornton Grant Thornton is one of the world’s leading organisations that provide assurance, tax and advisory services. It operates globally in more than 100 countries. Grant Thornton has a strong foothold in China with more than 2,000 professionals located in 17 major business hubs. With a headcount of around 300, the national tax practice of Grant Thornton China provides one-stop-shop tax and business solutions that serves the entire life cycle of a business, from investment structuring, company set-up, tax compliance, supply chain planning, cash repatriation, to exit plan. About marcus evans Summits marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, case studies, roundtables and one-to-one business meetings. For more information, please visit: Upcoming Events CFO Summit (Australia) - CFO Summit (North America) - Tax Officers Summit (North America) - To view the web version of this interview, please click here: