China: Report on advance pricing agreement (APA) program

Total of 296 APAs signed from 2025 to 2023, with 36 signed in 2023

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January 13, 2025

The State Taxation Administration (STA) on December 26, 2024, released its 15th annual report on the advance pricing agreement (APA) program, detailing statistical data on implementation of APA in China from 2005 to 2023.

  • A total of 296 APAs have been signed from 2005 to 2023, including 153 unilateral APAs and 143 bilateral APAs. In 2023, 36 APAs were signed, out of which nine were unilateral and 27 were bilateral. The number of signed APAs has steadily increased, with the number of bilateral ones reaching a record high in 2023. Of the 27 bilateral APAs signed in 2023, 14 are new APAs and 13 are renewals. In 2023, there were a total of 60 bilateral APAs in the intention stage, increasing by 13 compared to that of 2022.
  • In terms of the time required to conclude an APA, all nine unilateral APAs signed in 2023 were concluded within 24 months. Among 27 bilateral APAs, 13 were concluded within 24 months, and 14 took more than 24 months to conclude.
  • Of the 143 bilateral APAs signed by Chinese tax authorities from 2005 to 2023, 99 were signed with other Asian countries, accounting for about 70% of the total number of the signed bilateral APAs. Of the 27 bilateral APAs signed in 2023, 22 were concluded with other Asian countries.
  • Of the 36 APA cases successfully signed in 2023, 28 involved the manufacturing industry, six involved the wholesale and retail industry, one involved the scientific research and technical services industry, and one involved other industries. From the perspective of the related party transaction types, there were 36 cases involving tangible asset transactions, 12 cases involving intangible assets transactions, 13 cases involving services transactions, and one case involving financing transactions.
  • As of 2023, among the signed APAs, the transactional net margin method (TNMM) was the most frequently used method, being used 299 times and accounting for 83% of all the applied transfer pricing methods. In terms of other methods applied, the cost-plus method (CPM) has been used 21 times, the profit split method (PSM) has been used 14 times, and the comparable uncontrolled price (CUP) method has been used 10 times. Among the 36 APA cases successfully signed in 2023, TNMM was used 41 times, other methods were used five times, the CUP method was used twice, the resale price method (RPM) was used once, and the PSM was used once.

For more information, contact the Global Leader of KPMG Global Transfer Pricing Services:

Burcin Nee | bnee@kpmg.com

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