What obligations are placed on FIEs by the Transfer Pricing Notice?

The Tax Affiliate Rules place an obligation on all FIEs and foreign enterprises with affiliates in China to file annually with the Chinese tax authorities a special form specifying affiliate transactions. A fine of up to RMB10,000 may be imposed on enterprises that miss the filing deadline. The forms will be used as a basis for determining the transaction amounts between affiliates and later deciding which enterprises should be audited.