(ANNOUNCEMENT [2013] NO. 19) (国家税务总局关于非居民企业派遣人员在中国境内提供劳务征收企业所得税有关问题的公告), ISSUED BY SAT

According to the Announcement, if non-resident enterprises (the "dispatching enterprises") dispatching personnel to provide labor services in China bear partial or all responsibilities and risks for work results of dispatched personnel, and usually assess the performance of dispatched personnel, the dispatching enterprises will be deemed as having established offices or premises in China to provide labor services. If dispatching enterprises are contracting parties to tax treaties and have relatively fixed and permanent offices or premises to provide labor services, these offices or premises will be deemed permanent establishments in China. The Announcement illustrates the factors to consider when judging whether the dispatching enterprises have established offices or premises or permanent establishments in China.

The Announcement also clarifies that when dispatching enterprises dispatch personnel to provide labor services in China only to exercise shareholders' rights or to protect their legitimate rights and interests as shareholders in receiving enterprises, even when dispatched personnel (i) make suggestions for dispatching enterprises on investment in receiving enterprises, and (ii) participate in receiving enterprises' general shareholders meetings or directors meetings and other activities on behalf of dispatching enterprises, the dispatching enterprises will not be deemed to have established offices, premises or permanent offices in China, because these activities are carried out in the business premises of the receiving enterprises.

The Announcement also provides requirements relating to the tax registration and records of the dispatching and receiving enterprises.

Date of issue: April 19, 2013. Effective date: June 1, 2013.