China Gives Focus to Withholding Tax Avoidance Arrangements for Chinese Sourced Dividends

China's State Administration of Taxation has instructed national and local tax bureaus to submit information forms on a nationwide investigation into potential tax avoidance concerning dividend distributions to non-residents by foreign invested enterprises for 2012 and 2013. If any issues are discovered, further investigation into other years may be conducted.

The investigation mainly targets foreign invested enterprises with a large amount of retained earnings and intercompany receivables t…