Chinese groups with related-party cross-border transactions must prepare contemporaneous transfer pricing documents — local file and master file thresholds apply — and file annual related-party transaction forms with CIT returns.
Requirements: (1) Related-party transaction form (annual, with CIT return) — mandatory for all with related transactions. (2) Local file: required when tangible-goods transactions exceed RMB 200 million or other transactions exceed RMB 40 million yearly. (3) Master file: for groups receiving single-function 'cost-savers' requests or meeting country thresholds. (4) Country-by-Country reporting for ultimate parents ≥ RMB 5.5 billion revenue. (5) Practical hotspots for Chinese going-global groups: procurement intermediary margins, group service fees, royalty flows to offshore IP, and intercompany financing rates — all four are audit magnets. Documentation prepared AFTER an inquiry arrives is 'contemporaneous' in name only; build it into the annual cycle.
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