International Tax Alert - November 2014

November 2014

Recent statements by an official of the Chinese State Administration of Taxation (“SAT”), in conjunction with prior guidance issued by the Internal Revenue Service, as set forth in Technical Advice Memorandum (“TAM”) 8806002, suggest that the two tax authorities may not be far apart in how management and service fees are treated. As a result, analyzing these expenses under the approach outlined in the TAM may help United States multinationals in dealing with tax audits in China.