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US, China Reach International Tax Agreement Involving Wal-Mart January 12, 2007

Posted by notapundit in US News.
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WASHINGTON (Dow Jones)–The Internal Revenue Service said Friday it completed an agreement with China on international tax issues involving Wal-Mart Stores Inc. (WMT).

The IRS and the People’s Republic of China reached the first bilateral “advanced pricing agreement” between the two countries. Such an agreement enables taxpayers and the IRS to resolve potential double taxation disputes under U.S. tax law and relevant income-tax treaties.

“We’re working closely with China as they develop their tax administration system,” IRS Commissioner Mark W. Everson said in a statement. “This is an important event, and I’m pleased we’ve been able to reach this agreement with the Chinese tax authority and Wal-Mart.”

Advance pricing agreements are a common tool used by the IRS and multinational companies to resolve international tax issues. In 2006, there were 82 such agreements completed.

By Rob Wells, Dow Jones Newswires

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