HONG KONG — China’s tax officials plan to step up efforts to collect taxes from multinational corporation in the latest of a series of moves in the last year, mostly against Western companies. The activities have included police raids on the headquarters of companies’ China operations and heavy fines under antimonopoly law.
The State Administration of Taxation said that it would be looking in detail at how companies move money and allocate costs among their Chinese operations and their overseas businesses. Although such a review could also be applied to the many Chinese businesses that have set up holding companies in the Cayman Islands and elsewhere to avoid taxation, accountants said the main target of the latest initiative appeared to be foreign-owned firms.
“The focus right now is multinationals’ paying their fair share of taxes,” said Howard Yu, a corporate tax partner at PricewaterhouseCoopers in Beijing. He added that the Beijing office of the national tax agency had set up an international division with an emphasis on auditing multinationals.
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Andrew Choy, a partner at Ernst & Young, said the rule made foreign companies nervous because unlike in countries like Australia, Canada and the United States, it was nearly impossible in China to challenge the tax authorities’ decisions in court.
A version of this article appears in print on February 5, 2015, in The International New York Times. Order Reprints| Today’s Paper|Subscribe
