Companies operating in China using foreign- registered structures to minimise onshore tax should be braced for more aggressive scrutiny from mainland authorities, tax advisers have warned.
Thousands of companies, from state-owned industrial giants to small foreign investment vehicles, which conduct most of their business in China, are registered overseas for tax reasons.
However, tax advisers who have tracked a series of rulings and guidelines issued by central and provincial authorities said foreign- registered vehicles were coming under unprecedented scrutiny as governments adopt international standards to help boost revenue.
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