China's Advance Tax Ruling Regime In Place

China has implemented an advance tax ruling system starting from 1 March 2012. This is an important development as it enables taxpayers to obtain certainty in advance on their tax positions.

According to the Trial Guidelines, a competent tax authority may, upon request, issue an opinion to a taxpayer on how the tax laws, regulations and circulars should be interpreted and applied in the case at hand. The Trial Guidelines stipulate that a tax authority may not issue an opinion if:

• the opinion concerns tax matters subject to permission or approval of the tax authorities;
• the tax authority is not competent in respect of the relevant tax matter;
• the opinion would be contrary to the rules of a higher authority; or