Tax
New Tax Preferential Policy for Overseas Investors in China: Tax Credit from Dividend Reinvestment
The Ministry of Finance, the State Administration of Taxation (SAT) and the Ministry of Commerce have jointly released announcement on the tax credit policy for direct investment by overseas investors using distributed profits (Tax Credit Policy) on June 27, 2025, in order to boost the economy, further encourage overseas investments, and promote continuing operations within China on a long-term basis. The Tax Credit Policy provides the overseas investors tax credit on distributed profits that are re-invested directly in China by satisfying certain conditions.China: The State Administration of Taxation expands the circumstances of issuing Tax Residency Certificate
The Chinese current rules allow issuing a Tax Residency Certificate solely for claiming tax treaty benefits. While this is the primary purpose, there are various legal, financial, and regulatory reasons for Chinese tax residents to provide this certificate abroad. Effective April 1, 2025, the new rules will broaden the circumstances for issuance, benefiting outbound investments by Chinese investors, foreign-invested companies, and foreign individuals.VAT Law Enacted: New Stage of China's VAT Legislation
After rounds of public consultation, the Value Added Tax Law of the People's Republic of China was announced on 25 December 2024 and will be effective from January 1, 2026. As one of the most important type of taxes in China, it is a remarkable milestone of the legislative process in China.International Tax Review recognizes Garrigues as Firm of the Year in Transfer Pricing and Indirect Tax
Besides being shortlisted for best firm of the year in all existing categories, Garrigues has been doubly recognized as Firm of the Year in Spain in the categories of Transfer Pricing and Indirect Tax.China: Dealing with the future tax administration on enjoying treaty benefit for preferential tax rate on dividends
Under China's tax laws, non-resident companies generally face a 10% tax on China-sourced dividends, but avoidance of Double Taxation Treaties with countries like Spain or France can reduce this to 5% if specific conditions are met. These companies must self-assess eligibility, submit forms, and maintain documentation, as Chinese authorities rigorously verify treaty benefit claims. If the reduced rate is not applied and excess tax is paid, companies can request refunds within three years.Garrigues wins three awards from 'El Confidencial', including best law firm
At the gala presentation of the II Edition of the El Confidencial Business Lawyer Awards, held last night in Madrid, Garrigues won three awards: Best Law Firm, Best Tax Team and Best Firm Lawyer by Fernando Vives, executive chairman of the firm.China: Completing tax related obligations for 2023 regarding related-party transactions and contemporaneous documentation
Pursuant to Announcement of the State Administration of Taxation [2016] No.42, companies might have tax related obligations under certain circumstances for the matters in relation to: (i) reporting the business transactions with related parties, (ii) submission of country-by-country report, and (iii) preparing contemporaneous documentation, including master file, local file and special issue file.