There have been a number of significant world events this year putting management of international trade risks back on many boardrooms' agendas. The recent failure of Hanjin Shipping Co. was described by some as similar to the collapse of Lehman Brothers for the shipping industry, and highlights the potential chaos such disruptions could bring to multinational companies. The WTO mid-year report cited a significant increase in trade restrictive measures and an increase in protectionist sentiment around the world, and some companies have even been challenged with billions of dollars of additional tax assessments in their international dealings. The OECD has released their final reports on their Base Erosion and Profit Shifting (BEPS) action plans to tackle tax avoidance, and China has also issued their own local version of BEPS recently, which may have significant impact on a company's transfer pricing and customs valuation.
In managing international trade risks, companies with businesses in Asia would typically place China as one of the top locations requiring special attention due to the complexity of its customs and trade regulatory environment and the potential significant impact to businesses caused by non-compliance. Based on PwC's latest customs and international trade survey, 71% of the surveyed companies were audited by China Customs in the past year and 38% of those companies audited byChina Customs required payment of additional import taxes, with 11% of cases still pending closure.
Derek Lee, PwC China's Worldtrade Management Services Partner, based in Shanghai and also covering Hong Kong, lead this webinar on a number of new developments where companies should focus on in designing and updating their China customs and international trade compliance and risk management programs. The following 5 areas deserve special attention by companies conducting international trade with China and are discussed on the webinar:
- New declaration form disclosure requirements on related party transactions and royalties
- Customs valuation implications of the new China transfer pricing BEPS requirements
- Recent Customs audit focus areas on royalties and licenses fees
- New circular on customs audit and voluntary disclosure
- eCommerce regulatory developments
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