China Transfer Pricing updates: Simplified Unilateral Advanced Pricing Agreement application procedures

Summary: China's State Taxation Administration (SAT) released the draft regulation of simplified Unilateral Advanced Pricing Agreement (UAPA) application procedures recently, which is now for public consultation and expected to be published within this year. Since the new APA regulation launched in 2016, more and more MNEs in China are considering APA to secure the tax certainty. The existing APA regulation requires 6 phases for both UAPA and BAPA application which usually takes a long time to reach the final consensus. In order to improve the efficiency, SAT worked out this simplified application procedures for UAPA. According to the draft version, the procedures of applying UAPA is simplified as much as possible, which is shortened from 6 to 3 phases and the time of reaching the final consensus is limited to 6 months. The new regulation is absolutely a milestone of APA application in China, which will offer another channel for tax payers on tax certainty.(Live presentation was aired on 29 June 2021)