About this paper

Accompanying with China’s ongoing outward-oriented reform, more and more multinational enterprises have tried to explore the Chinese markets and the permanent representative offices have become the popular organizational form in recent years. However, with the increase in the number of foreign permanent representative offices in China, the collection and administration issues of individual income tax in foreign affairs have become much more prominent. This paper analyzes two typical cases dealt by the Fifth Inspection Bureau of Beijing Local Taxation Bureau based on current individual income tax policies. The paper further analyzes tax policy implementation problems in foreign permanent representative offices, application issues of tax treaties, and technical difficulties of tax collection and administration. The paper suggests that the individual income tax laws and regulations on foreign permanent representative offices should be modified; the tax bureau should reinforce tax publicity on foreign permanent representative offices; the information network among related departments should be established as soon as possible in order to help tax bureau obtain sufficient information about foreign permanent representative offices. These measures will help maintain the country’s tax base not be eroded and improve the efficiency of tax collection and administration in foreign affairs.

Reference

A Research on the Issues of Individual Income Tax Collection and Administration in Foreign Permanent Representative Offices [J]. International Taxation, 2017(12).