The State Administration of Taxation of China has published Circular 84 of 28 December 2017 regarding the determination of foreign tax credits. According to foreign tax credit rules, resident companies and permanent establishments of non-resident companies are required to calculate tax credits on a per jurisdiction basis.
As per Circular 84 tax credits may instead be calculated on an aggregate basis with all foreign income from all jurisdictions. If a company wants to modify the method applied from the previous year, it must be applied for at least 5 years. This circular is effective retroactively from 1 January 2017.
