According to a recent Deloitte webcast China is simplifying its procedures for outbound payments.
Bulletin  No. 40 and Huifu  No. 30 removes the requirements of tax clearance certificates for outbound payments.
Also, SAFE is allowing cross-border cash pooling for pilot multinational companies and state-owned enterprises. This allows for cross-border intercompany borrowing, lending and netting or cash pooling (within limits). Tax considerations include deductibility of intercompany interest expense, withholding tax on interest payments, and transfer pricing issues concerning intercompany charges.
Further, excess cash from the China operations of an MNC could be used to finance overseas cash needs of sister companies via equity or debt.
Can we expect more easing of cross-border movement of Renminbi as China prepares its way for Renminbi to become one of the global reserve currencies?
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