As you Wish

Is There A Double Taxation Agreement With China

Interested companies should ask their consultants about the applicable price per service. However, it is generally between 10 and 20% of the total value of the bill. In many cases, DBAs can cut this amount in half. For example, the services that the parent company charges for the use of royalties on the trademarks of its own subsidiary may be transferred to the parent company at a lower rate than the 10% withholding tax levied in China. Albania, Armenia, Austria, Belarus, Bulgaria, Bulgaria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Latvia, Lithuania, Luxembourg, Macedonia, Malta (signed but not yet effective) Moldova, Norway, Sweden, Iceland, Ireland, Italy, the Netherlands, Poland, Portugal, Romania , Russia, Serbia and Montenegro, Slovakia, Slovenia, Spain, the United Kingdom and Switzerland (U.K) Ukraine, Uzbekistan and Bosnia and Herzegovina. However, the double taxation convention policy facilitates non-Chinese businesses by reducing withholding tax to about 50%. This provision is particularly useful for multinationals with subsidiaries in China. For example, if a Chinese-based partner uses MNC-owned intellectual property, it must pay only about 10% of WHT instead of the initial 20% against fees for services used. Contracts also adjust WHT rates for different types of income and construction times. It is interesting to note that the Argentine treaty contains a clause of the Most Favoured Nation (MFN) that will automatically change the WHT rates of the treaty, where Argentina signs a more favourable contract with another country. This is the second Chinese contract that contains such a clause after the 2015 DBA between China and Chile. A foreign company is subject to withholding tax (also known as WHT) when it charges for the services provided to a Chinese company.

WHT generally is about 10-20% of the calculated amount and is billed to non-residents in lieu of another tax paid by a resident company for a similar transaction.