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Third Quarter 2023 Asia Transfer Pricing Brief

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The Q3 2023 Asia Transfer Pricing Brief highlights Singapore’s proposal to implement the global minimum tax, Malaysia’s new transfer pricing rules, and India’s signing of 95 Advance Pricing Agreements. Asia’s emerging markets continue to attract multinational enterprises, making transfer pricing an important issue. It involves pricing arrangements between associated enterprises in different tax jurisdictions, requiring adherence to the “arm’s length standard” in line with international regulations.


In our first Asia Transfer Pricing Brief for Q3 2023, we provide the latest transfer pricing updates from Asia countries. Singapore proposes the implementation of the global minimum tax starting from January 1, 2025. Malaysia introduced new transfer pricing rules that will be effective for the year of assessment (YA) 2023 and onwards. India announced a landmark achievement, with the signing of 95 Advance Pricing Agreements in the fiscal year 2022-23.

Asia remains one of the world’s primary investment hubs, attracting an increasing number of businesses that have either expanded or are contemplating expansion into its high-performing emerging markets. For multinational enterprises (MNEs), transfer pricing is an important issue that demands attention sooner or later.

Transfer pricing concerns the pricing arrangements between associated enterprises (AE) operating in different tax jurisdictions for their intercompany transactions. In alignment with international regulations, Asian taxpayers engaged in transactions with other group entities must substantiate that these dealings adhere to the “arm’s length standard.” This standard necessitates taxpayers to prove that their transactions with related parties mirror those with third parties in a similar manner and under comparable conditions.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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Proposed Regulations in China Seek to Regulate After-School Tutoring Services

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China’s Ministry of Education introduced new draft regulations to manage off-campus training in the after-school tutoring industry, following a crackdown in mid-2021. The regulations focus on prohibiting for-profit classes for core curriculum subjects in Grades 1-9, with fines up to RMB 100,000 for unlicensed services.


China’s Ministry of Education recently unveiled

On February 8, 2024, China’s Ministry of Education released the Regulations on the Management of Off-Campus Training (Draft for Solicitation of Comments) (hereinafter, the “draft regulations”). This new set of regulations for the after-school tutoring industry marks a substantial national-level effort to overhaul the sector. It follows a broader reform of the private tutoring industry initiated in mid-2021.

In this article, we delve into the specifics of the new draft regulations, shedding light on their potential implications within the broader context of China’s dynamic education sector.

Fast forward to July 2021, the Chinese government implemented a far-reaching crackdown on the private tutoring industry, effectively prohibiting tutors from conducting for-profit classes in core curriculum subjects. Dubbed the “shuangjian” or “double reduction” policy, its primary objective was to alleviate financial strains on families and reduce academic burdens on students by curbing excessive homework and after-school tutoring.

Notably, the regulations primarily targeted compulsory education (Grades 1-9), making it illegal to offer curriculum-based classes for profit. Conversely, non-academic extracurricular activities like art and sports remained largely unaffected, while high schools (Grades 10-12) experienced minimal disruption across academic and non-academic domains.

Building upon these reforms, in September 2023, China’s Education Ministry announced that unlicensed tutoring services in the country could face fines of up to RMB 100,000 (US$13,715.54). The announcement represents an example of the government’s broader strategy to reshape China’s education landscape.

For the first time, a clear definition of after-school tutoring is provided in high-level legislation. The term “off-campus training” as mentioned in the draft regulations is delineated as “organized or systematic educational training activities conducted outside the school education system, targeting primary and secondary school students as well as preschool children aged 3 to 6 with the main purpose of improving academic performance or cultivating their interests and talents”.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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China arrests more than 1,000 Tibetans protesting Chinese dam project

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Police on Friday arrested more than 1,000 Tibetans, including monks from at least two local monasteries, in southwestern China’s Sichuan province after they protested the construction of a dam expected to destroy six monasteries and force the relocation of two villages, two sources from inside Tibet told Radio Free Asia.

The arrested individuals – both monks and local residents – are being held in various places throughout Dege county in Kardze Tibetan Prefecture because the police do not have a single place to detain them, said the sources who requested anonymity for safety reasons.

Those arrested have been forced to bring their own bedding and tsampa – a staple food for Tibetans that can be used to sustain themselves for long periods of time, the sources said.

“That police are asking Tibetans to bring their own tsampa and bedding is a sign that they will not be released anytime soon,” one of the sources said.

On Thursday, Feb. 22, Chinese authorities deployed specially trained armed police in Kardze’s Upper Wonto village region to arrest more than 100 Tibetan monks from Wonto and Yena monasteries along with local residents, many of whom were beaten and injured, and later admitted to Dege County Hospital for medical treatment, sources said.

Citizen videos from Thursday, shared exclusively with RFA, show Chinese officials in black uniforms forcibly restraining monks, who can be heard crying out to stop the dam construction. 

Following news of the mass arrests, many Tibetans from Upper Wonto village who work in other parts of the country returned to their hometown and visited the detention centers to call for the release of the arrested Tibetans, sources said. They, too, were arrested. 

The Dege County Hospital did not immediately return RFA’s requests for comment.

The Chinese Embassy in Washington hasn’t commented on the arrests other than in a statement issued Thursday that said the country respects the rule of law.

“China protects the legitimate rights and interests of Chinese nationals in accordance with the law,” the statement said.

Massive dam project

The arrests followed days of protests and appeals by local Tibetans since Feb. 14 for China to stop the construction of the Gangtuo hydropower station.

RFA reported on Feb. 15 that at least 300 Tibetans gathered outside Dege County Town Hall to protest the building of the Gangtuo dam, which is part of a massive 13-tier hydropower complex on the Drichu River with a total planned capacity 13,920 megawatts. 

The dam project is on the Drichu River, called Jinsha in Chinese, which is located on the upper reaches of the Yangtze, one of China’s most important waterways. 

Local Tibetans have been particularly distraught that the construction of the hydropower station will result in the forced resettlement of two villages – Upper Wonto and Shipa villages – and six key monasteries in the area  – Yena, Wonto, and Khardho in Wangbuding township in Dege county, and Rabten, Gonsar and Tashi in the Tibetan Autonomous Region, sources told RFA.

Sources on Friday also confirmed that some of the arrested monks with poor health conditions were allowed to return to their monasteries. 

However, the monasteries – which include Wonto Monastery, known for its ancient murals dating back to the 13th century – remained desolate on the eve of Chotrul Duchen, or the Day of Miracles, which is commemorated on the 15th day of the first month of the Tibetan New Year, or Losar, and marks the celebration of a series of miracles performed by the Buddha.

“In the past, monks of Wonto Monastery would traditionally preside over large prayer gatherings and carry out all the religious activities,” said one of the sources. “This time, the monasteries are quiet and empty. … It’s very sad to see such monasteries of historical importance being prepared for destruction. The situation is the same at Yena Monastery.” 

Protests elsewhere

Tibetans in exile have been holding mass demonstrations in various parts of the world, including in Dharamsala, India, home to the exiled Tibetan spiritual leader, the Dalai Lama. 

In the past week, Tibetans have demonstrated before the Chinese embassies, including those in New York and Switzerland, with more such protests and solidarity campaigns planned in Canada and other countries. 

“The events in Derge are an example of Beijing’s destructive policies in Tibet,” said Kai Müller, managing director of the International Campaign for Tibet, in a statement on Friday. “The Chinese regime tramples on the rights of Tibetans and ruthlessly and irretrievably destroys valuable Tibetan cultural assets.”

“Beijing’s development and infrastructure projects are not only a threat to Tibetans, but also to regional security, especially when it comes to water supplies to affected Asian countries,” he added.

Human Rights Watch told RFA that it is monitoring the development but that information from inside Tibet is extremely rare given China’s tight surveillance and restrictions imposed on information flow. 

“People who send information out and videos like this face imprisonment and torture,” said Maya Wang, the group’s interim China director. 

“Even calling families in the diaspora are reasons for imprisonment,” she said. “What we do see now are actually … typical scenes of repression in Tibet, but we don’t often get to see [what] repression looks like in Tibet anymore.”

Additional reporting by Pelbar, Yeshi Dawa, Tashi Wangchuk, Palden Gyal and Sonam Lhamo for RFA Tibetan. Edited by Roseanne Gerin and Malcolm Foster.

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Canberra ties the knot with Washington

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Canberra ties the knot with Washington

Abstract

Australia has shifted its strategy towards favoring the United States over China due to increasing fear of Chinese power and the competitive Indo-Pacific environment.

The ‘riding two horses’ strategy adopted by Canberra over the past 25 years has shifted in favor of the US alliance to counter China’s growing power. Previous prime ministers sought to balance relations between China and the US, with Kevin Rudd aiming for ‘true friendship’ with China while also promising military intervention if needed. Tony Abbott’s approach was driven by ‘fear and greed’, and John Howard acknowledged the benefits of a relationship with both countries.

However, Prime Minister Anthony Albanese has expressed a desire to strengthen the US alliance and cooperate with China while also engaging in Australia’s national interest. This shift is evident in actions such as sending a warship through the Taiwan Strait and introducing legislation to facilitate the AUKUS security partnership.

The Indo-Pacific environment has become more competitive, leading Australia to prioritize fear over greed in its alignment. As China’s GDP continues to rise and may overtake the US by 2030, Canberra’s strategy is likely to continue favoring alignment with Washington due to the lack of a viable alternative for addressing its fear of China’s power.

Read the complete article on East Asia Forum

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