"Administrative Measures on the General Anti-Avoidance Rule (Trial)" ("GAAR") will come into effect on 1st January, 2015
SAT has released “GAAR” recently, which has further specified the relevant rules on the general anti-avoidance, based on the Corporate Incoming Law and its Detailed Implementation Rules, and Implementation Measures on Special Tax Adjustments (Trial). Then main content includes: Application scope Arrangements not involving cross-border transaction or payment; and Illegal tax behaviors potentially related to avoiding tax payments, avoiding paying taxes due for recovery claim from tax authorities, cheating on taxes payable, refusing to pay taxes and provide forged tax invoices. Major features of a “tax avoidance arrangement”: Obtaining a tax benefit is the sole purpose, or the main purpose;…