A 360-degree look at secondment tax issues: China and the US

By Roberta Chang

In this article, Roberta Chang discusses the recent guidance issued by the Chinese State Administration of Taxation on when a foreign company’s secondment arrangement into China will be deemed to have created a taxable presence. Christine Lane and Gene Magidenko comment on how the Chinese regulations on cross-border secondment arrangements differ from those under US tax laws.

When structuring cross-border secondment arrangements, a foreign company dispatching the secondee (the Home Country Entity) to a company in China (the Host Entity) will typically maintain its employment relationship with the secondee in order to: prevent the application of PRC employment law (which is generally more employee friendly) and; preserve the secondee’s participation in their home country benefits.

However, focusing on these goals exposes the arrangement to the risk of the Home Country Entity being deemed to have a permanent establishment (PE) in China.

If you are registered and logged in to the site, click on the link below to read the Hogan Lovells briefing. If not, please register or sign in with your details below.

Briefings from Hogan Lovells

View more briefings from Hogan Lovells

Analysis from The Lawyer

View more analysis from The Lawyer

Overview

Atlantic House
Holborn Viaduct
London
EC1A 2FG
UK
http://www.hoganlovells.com

Turnover (£m): 1,030.00
No. of Lawyers: 2,280
No. of Lawyers (Asia Pacific): 204
Offices (Asia Pacific): 9