Tax Dispute Mediation and Resolution
In the process of tax assessment and audit, taxpayers, whether they are individuals or enterprises, cannot avoid tax controversies or disputes over various matters with tax authorities. Challenges can arise from different understandings of tax regulations, or from intentional tax evasion or avoidance by taxpayers. Due to the China’s evolving tax laws, the specific mechanisms for the projection of taxpayers’ rights and remedies are continuously being improved. The resolution of tax disputes within a legal framework is becoming a common issue faced by both taxpayers and tax authorities. JunHe has expertise and experience in appeal and litigation to bring disputes to a successful conclusion. We are adept at making the application of tax laws and regulations clear, enabling taxpayers to mitigate potential tax compliance risks in the course of their business.
The JunHe taxation practice team is composed of senior practitioners who have led the market for many years as well as several promising rising stars. Our team includes former officials of the State Administration of Taxation, lawyers from premier international and domestic law firms and researchers from well-known finance and taxation institutions. Together, they offer clients unparalleled strength in reading the subtext of macro policies, finely honed skills in analyzing practical issues, solid theoretical knowledge, extensive experience, strong communication skills, and solution-oriented approaches. Our team has extensive experience in resolving tax-related disputes, and has helped clients mediate and resolve a variety of tax issues with respect to export tax rebates, IIT refunds, assets management products and transfer pricing.
Key Practice Areas
Tax investigations: assisting clients in responding to general tax examinations/inquires brought by tax authorities;
Tax dispute resolution: assisting clients in resolving tax controversies in relation to administrative penalties, change of residence for tax purposes, deregistration, outbound payments and claims for tax refunds;
Tax audits: assisting clients in responses to tax audits, risk analysis, documentation preparation, negotiations with tax authorities, etc.;
Tax appeals: drafting legal documents, collecting and organizing evidence, requests for document discovery, appearing at appeal hearings and representing clients in settlement and mediation;
Tax litigation: drafting legal documents, collecting and organizing evidence, requests for document discovery, appearing at trials and representing clients in settlement and mediation.
Recent Representative Cases
Advising a well-known Chinese privately-owned restaurant company on tax issues involved in interim distribution
A well-known Chinese privately owned catering company planned to make an interim distribution to its investors. The relevant tax authority raised an objection to the legality and legitimacy of the interim distribution from the perspective of the Company Law and corporate income tax law. At the client’s request, we conducted legal research on the controversial issues of the case and assisted the client in communicating with the tax authority.
Advising an individual on the tax treatment of earn-out payments
An individual entered into earn-out agreement with an investor in connection with the disposal of a company’s equity that he held. The individual disagreed with the tax withheld, the tax rate applied for the payment of the earn-out considerations under that agreement. At the client’s request, we conducted legal research on the nature of the gains and assisted the client in communicating with the withholding agent and the relevant tax authority.
Assisting a Chinese private enterprise in responding to tax audits
A Chinese private enterprise conducted sales activities on a well-known e-commerce platform in China. Based on tax assessments and other records, the relevant tax authority carried out a tax audit on the client. We assisted the client in reviewing the facts of the case, estimating the amount of the tax risk, analyzed the tax liability and prepared the responses to the tax audit.
Advising a Chinese fund in a tax dispute with an asset manager
A Chinese fund invested in a fund portfolio managed by an asset manager. When making profit distribution, the parties disagreed on the interpretation of tax provisions of the investment agreement, and the asset manager had deducted and withheld a certain amount from the distribution for taxation purposes. We assisted the client in reviewing the investment agreement to determine the tax assumption and communicated with the asset manager and the relevant tax authority.
Advised a foreign technology company on the tax treatment of outbound payments
A foreign technology company provided technical services to its Chinese corporate user. The relevant taxation authority considered the service fees paid to the client by the corporate user as ‘royalties’ which would be subject to withholding corporate income tax. We analyzed the nature of the business model adopted by the client, addressed the related tax treatment, and assisted the client in communicating with the relevant tax authority.