Asia Tax Bulletin Summer 2017

OECD Multilateral Convention (MLI)

China signed the MLI on 7 June 2017. It has opted out of the MLI's permanent establishment (PE) provisions concerning (i) artificial avoidance of PE status through commissionaire arrangements and similar strategies; (ii) artificial avoidance of PE status through the specific activity exemptions to their Covered Tax Agreements; and (iii) splitting-up of contracts.

China made the following reservations:

• Article 3 (Transparent Entities): The PRC reserves the right for the entirety of Article 3 not to apply to its Covered Tax Agreements.
• Article 9 (Capital Gains from Alienation of Shares or Interests of Entities Deriving their Value Principally from Immovable Property): The PRC reserves the right for Article 9(1)(a) not to apply to its Covered Tax Agreements.