On 12 March 2014, China Taxation News reported that the Qingdao State Tax Bureau (QSTB) collected RMB10.28 million (US$1.6 million) in enterprise income tax on the indirect transfer of a PRC real estate company. Tax officials became interested in the indirect transfer deal when local media reported on the deal.
The seller was a British Virgin Islands (BVI) company that sold its 100% equity interest in a BVI holding company to a Hong Kong publicly traded company in September 2011. The BVI holding company owned a 100% equity interest in a Hong Kong holding company, which in turn owned a 60% equity interest in a PRC real estate company. The remaining 40% equity interest in the PRC real estate company was owned by four Chinese companies. The BVI seller, the BVI holding company and the Hong Kong holding company all had the same legal representative, a Hong Kong resident.
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Business Law Digest is compiled with the assistance of Baker & McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker & McKenzie by e-mail at: Zhang Danian (Shanghai) danian.zhang@bakermckenzie.com
