challenges of internal control if internal control

What kinds of representative office activities are free of tax?

Following activities conducted by Representative offices can be exempt from tax: a) Market research b) Information collection, and c) Business liaison, where no income is generated. Any commissions, bonus or fees charged on behalf of the head office will be taxed.

What is the nature of representative office?

A representative office of a foreign entity plays a liaison role for its head office and China market. From legal perspective, it does not have a legal person status where all the liabilities will be borne by its foreign parent. Representative offices are taxed at different manners depending on how they are classified.