“Totality of Facts” approach confirmed for grant of tax treaty benefits for dividends

“Totality of Facts” approach confirmed for grant ...

China Tax Alert - Issue 10, May 2013   A circular issued by the State Administration of Taxation (SAT) provides some guidance on the assessment of beneficial ownership of dividends under the PRC-HK double tax arrangement (PRC-HK DTA) for the purposes of withholding tax relief. This circular has confirmed the position put forward in Circular 601 and Announcement 30 that a “totality of facts” approach be adopted in assessing the beneficial owner status of a non-resident enterprise in relation to dividends derived from China.