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Determining uncertain tax positions in China
Dec 2006 by Donald Compton
By now many multinational companies have begun the process of addressing how Financial Accounting Standards Board Interpretation No. 48 ("FIN 48") will apply to their global business. The challenge in understanding the FIN 48 implications for tax planning and local country compliance issues in foreign jurisdictions will be significant. FIN 48 requires companies to ascertain, evaluate, and conclude on discrete tax risks. Companies must not only account for the interest and penalties on these conclusions, but must also adhere to a new disclosure regime.
For companies operating in China, the tax planning environment creates another level of complex uncertain tax positions analysis. This complexity arises because many companies have negotiated at the provincial and local levels to reduce the national statutory rate, plus there are numerous local incentive regimes. This article, FIN 48: Determining uncertain tax positions in China (pdf file, 39KB), suggests some areas that companies currently or potentially operating in China should consider.
FAQ on Implementation of FIN 48
Jan 2007
Many calendar year-end companies will adopt FIN 48 in the first quarter of 2007. Our FAQ on Implementation of FIN 48 (pdf file, 241KB) contains certain questions and PwC interpretive responses to assist companies in understanding and implementing FIN 48. Topics covered include implications to foreign registrants, recognition and measurement issues, accounts presentation and disclosures.
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