Tax Controversy and Dispute Resolutions

Helping clients proactively prevent, efficiently manage and favourably resolve tax controversies and disputes with the Chinese tax authorities

Tax environment in China

The tax environment in China is one of the most complex and challenging tax environments around the globe. Frequent regulatory changes, inconsistent interpretation and practices, an aggressive tax audit environment, and lack of effective appeal in China have led to inevitable uncertainties and challenges for taxpayers.

Though Chinese tax authorities are striving to offer a better tax environment over recent years, taxpayers in general still find uncertainties and challenges as follows:

being the subject of multiple audits conducted by different levels of tax bureaus relating to different types of taxes (including transfer pricing investigation, Base Erosion and Profit Shifting driven investigation and other anti-tax avoidance investigations)
being challenged on cost / expense deductions and other filing positions due to ambiguous tax rules
determining the routes and procedures of how best to claim tax refunds, tax incentives and treaty benefits, and
being unable to assess risks where dealing with controversial tax policies (including direct and offshore indirect equity transfers, corporate restructuring, outbound payments and secondment issues).

All these factors routinely expose taxpayers to potential compliance risks, heavy penalties and surcharges, loss of tax benefits, double or multiple taxation and reputational risks.

How PwC China’s Tax Controversy and Dispute Resolutions (TCDR) team can help you

Tax controversy advice and strategy
Tax ruling application
Tax policy formulation
Tax audit defence
Advice for administrative appeal and litigation strategies and procedures
Mutual Agreement Procedure support

Tax controversy advice and strategy

By drawing on our knowledge and experience of the tax bureaus' investigation practices, we can help clients develop effective tax strategies to prevent or manage controversies or disputes.

Tax ruling application

We can help clients find out what is possible and what is not, how to organise affairs to get the best results, and the right way to pursue the tax ruling application process.

Tax policy formulation

We can help convey clients' concerns to China tax policy makers and formulate business-friendly tax policies.

Tax audit defence

We can help clients understand the motivations behind a tax audit, with key tax audit organisation and procedures identified, and we will put forward positive arguments to defend tax positions taken, as well as negotiating reductions in penalties and surcharges, where applicable.

Advice for administrative appeal and litigation strategies and procedures

During any tax administrative appeal or litigation process, we can highlight the strategy and ensure clients will be in full compliance with the obligations, ensuring full protection and exercise of legitimate rights.