China buyers warned on tax diligence following Circular 698

Author: | Published: 19 Sep 2011

Buyers should carry out tax due diligence prior to signing so as to avoid potential tax liabilities.

Lawyers in Hong Kong told delegates at last week’s IFLR Asia private equity forum that Circular 698 had placed a far greater emphasis on tax due diligence carried out by the purchaser and tax indemnity structures than ever before.

Fangda Partners’ Jonathan Zhou said that in international transactions the buyer, as owner of the acquired target, would be the party that usually corresponds with relevant tax...