PRC indirect share transfers: tax burden rationalisation in a valuation downturn

During this period of economic uncertainty and market volatility, the valuation of Chinese-based portfolios has experienced a significant decline and the IPO process has also slowed down dramatically, which leads to a negative impact on the investment return. Meanwhile, the tax calculation for indirect share transfers can be complicated, with high uncertainty and controversy in practice due to a lack of clear guidance under the prevailing tax rules in the People’s Republic of China (PRC). In this context, international investors have an even higher expectation and need than ever before regarding the reasonableness of the tax treatment of PRC indirect share transfers. It is therefore essential to minimise the tax burden during a downturn of valuations, so as to enhance the investment return. In this webinar, Milano Fang and Tim Zeng, M&A tax partners at KPMG China, will discuss the PRC’s prevailing tax treatment of, and calculations for, indirect share transfers and the major causes of an unreasonable tax burden. They will also share their observations on typical market practice and insights on a potential breakthrough via a modification to the calculation method, with the aim of rationalising the tax burden. The free webinar offers the opportunity to raise questions for the speakers on the taxation of indirect share transfers in the PRC. Sign up today.