On August 14, 2026, the Office of the Jiangsu Provincial Tax Service of the State Taxation Administration issued the International Tax Compliance Plan of the Jiangsu Provincial Tax Service of the State Taxation Administration (2026-2028) (Su Shui Ban Fa [2026] No. 25, hereinafter the "2026 Plan"), together with the Cross-Border Tax-Related Risk Alerts of the Jiangsu Provincial Tax Service, which systematically sorts out 46 typical cross-border tax-related risks. This is the latest edition since Jiangsu began continuously issuing international tax compliance plans in 2014, roughly two years after the previous edition, the Jiangsu Provincial International Tax Compliance Plan (2024-2025). This article interprets the 2026 Plan across five dimensions鈥攖extual structure, work philosophy, regulatory priorities, service measures, and the risk list鈥攁nd compares it with the core differences from previous annual editions, providing taxpayers engaged in cross-border transactions with a benchmark for compliance and analytical reference.
Interpretation of the 2026 Plan
Work philosophy: a "five-in-one" overall framework
The plan sets out the overall approach for the Jiangsu Provincial Tax Service's international tax work over the next three years, which can be summarized as a four-in-one positioning of "foundation-strengthening project + efficient taxation + three-governance pathways + compliance as the main thrust," with five specific work philosophies: using "digital tax governance" as the key underpinning to build a new digital cross-border regulatory system. Leveraging the intelligent support of the "cross-border tax source informatization management system" for monitoring cross-border profit levels, it drives forward from three directions鈥攄ata integration and application, indicator model construction, and risk analysis and response鈥攊ntegrating "human-machine collaboration and the combination of point and surface" across three levels: single-entity analysis of key enterprises, overall analysis, and analysis of common risks in related-party transactions across the province, ultimately converging into an international tax big data management platform integrating business, data, technology, and institutions. This philosophy shows that Jiangsu's cross-border tax source management has moved from "experience-driven" to an intelligent regulatory model integrating data, models, and platforms.
Using "high-level dialogue" as the methodological pathway to upgrade the new pattern of tax-enterprise cooperation. In response to the reality that pricing power and decision-making authority of multinational enterprises are concentrated at group headquarters, a direct channel mechanism between "tax authorities and the pricing decision-making level of group headquarters" has been established, breaking the traditional practice of local subsidiaries reporting up level by level, and engaging in "headquarters-to-headquarters" direct dialogue and communication with group senior management. This is a landmark innovation in the 2026 Plan's communication mechanism.
Using "Tax Road Connect" as the service carrier to create a new international cross-border service ecosystem. Deepening the connotations of the "Tax Road Connect 路 Su Fu Da" brand built by the Jiangsu Provincial Tax Service, embodying the concept of "integrating compliance management with the entire process of cross-border tax and fee services." Using "compliance management" as the core orientation to create a new differentiated tax governance model. Dividing risk response levels based on two factors鈥?ltax loss risk" and "tax compliance performance"鈥攊t forms a three-tier closed loop: "high-compliance enterprises receive certainty services鈥攍ow-risk, well-compliant enterprises receive autonomous compliance space鈥攈igh-risk non-compliant enterprises receive progressive responses," highlighting precise governance that "combines leniency and strictness, and applies both firmness and flexibility." Using "internal and external coordination" as important support to create a professional international tax administration collaboration landscape. Internally, the Jiangsu Provincial Tax Service coordinates with multiple departments including development and reform, commerce, customs, and foreign exchange management; externally, it participates in the Belt and Road tax administration cooperation mechanism, uses intelligence exchange and the Common Reporting Standard (CRS) and other international tax exchange data, achieving "two-way supervision" of residents' overseas income and non-residents' domestic income.
Six major regulatory priorities
The 2026 Plan lists six major areas of cross-border tax regulation for the Jiangsu Provincial Tax Service over the next three years:
Impact of the "Pillar Two" global minimum tax rules
This is a newly added priority in the 2026 Plan and ranks first. As of January 2026, more than 70 tax jurisdictions (hereinafter "jurisdictions") have legislated to implement "Pillar Two," the United States has adopted a parallel arrangement, and major EU member states, the UK, Canada, Australia, Japan, South Korea, and China's Hong Kong and other economies have all implemented Pillar Two. The Jiangsu Provincial Tax Service closely tracks legislative progress, dynamically calculates the impact on large multinational companies' operating costs, effective tax rates, and global tax burdens, focuses on assessing the top-up tax obligations and funding pressures brought by the Income Inclusion Rule (IIR) and the Undertaxed Payments Rule (UTPR), and at the same time collects compliance difficulties of Jiangsu's "going global" enterprises and submits recommendations to the State Taxation Administration. This marks that the impact of international tax rule changes has entered the service and regulatory horizon of local tax authorities.
Value chain analysis in related-party transaction management
Focusing on the limitations of traditional transfer pricing methods (single transaction, single entity) under vertical integration of global industrial chains, it emphasizes strengthening value chain analysis from a global value chain perspective: first, standardizing the truthful and complete disclosure of value chain information in local files of contemporaneous documentation; second, deepening the application of the profit split method based on value chain analysis (especially dividing overall profits according to value contributions when comparable information is scarce), and using value chain data for cross-verification; third, emphasizing transformation of results and forming work guidelines. This priority highly echoes multiple transfer pricing risks among the 46 risks.
Risk of improper profit retention by domestic entities investing overseas
The Jiangsu Provincial Tax Service manages controlled foreign corporation (CFC) risks at both the enterprise and individual levels: Chinese resident enterprises establishing entities in low-tax (tax haven) locations to engage in non-active business activities and failing to distribute dividends for a long time without reasonable grounds; and Chinese resident individuals establishing shareholding platforms in low-tax (tax haven) locations to accumulate large amounts of passive income and failing to distribute it without reasonable business needs may both constitute CFC improper profit retention to avoid corporate income tax and individual income tax. In response, tax authorities will make full use of CRS and other automatic exchange of financial account tax-related information to collect overseas income information, guiding those willing to comply to repatriate dividends and adopting progressive management for those refusing to comply.
Risk of cross-border payment transactions eroding the tax base
As the scale of outbound payments expands and types extend (such as dividends, interest, royalties, and even cross-border related-party services, group cost sharing, and offshore financing arrangements), supervision highlights the authenticity of outbound payments (whether they occurred, whether withholding was made according to law, whether they were split or fabricated), accuracy, beneficial nature (whether expenses unrelated to local production and operations and functions, expenses serving group shareholders, and duplicate expenses were charged), and reasonableness (whether they conform to the arm's length principle, especially royalties). Relying on big data early warning, risk models, special verifications, and other means, it implements targeted supervision.
Substantive determination of treaty benefit eligibility
In the follow-up management stage of "self-assessment, declaration and enjoyment, and retention for inspection" for non-residents enjoying treaty benefits, it adheres to "substance over form," focusing on determining two situations: first, "beneficial owner" status (such as whether investment holding substantively performs functions and bears risks, and whether other business activities are sufficiently significant), and second, "treaty shopping" behavior (that is, treaty shopping: formally meeting the treaty but substantively having the main purpose of obtaining treaty benefits).
Cross-border related-party restructuring of equity and assets
Compliance supervision is carried out around three types of restructuring, including cross-border related-party equity transfers (especially whether the pricing of equity restructuring in overseas listings conforms to the arm's length principle), indirect equity transfers (focusing on transactions where "underlying assets are in China," integrating multi-source data such as industrial and commercial changes, tax filings, and listing announcements, and precisely comparing the relationship between "changes in overseas shareholders" and "ownership of domestic assets"), and cross-border transfers of ownership and use rights of intangible assets (reviewing the authenticity of ownership transfer, reasonableness of pricing, and consistency of income distribution).
Five major service measures
Relying on the "Tax Road Connect 路 Su Fu Da" brand, the 2026 Plan introduces five measures to provide better support for enterprises' cross-border development. Specifically, these include: taking multiple measures to improve policy certainty (continuously issuing plans, negotiating and signing advance pricing arrangements, promoting the application of the International Tax Collaborative Management Service Agreement, exploring a "tax + customs" transfer pricing coordination mechanism, and implementing deferred tax payment and treaty benefits); innovating and empowering to achieve service intensification (carrying out tax-enterprise salons by country and industry, symposiums for key cross-border taxpayers, and policy briefings for enterprises); broadening channels to upgrade enterprises' sense of gain (continuing to implement the "tax-enterprise face-to-face" mechanism, the 12366 cross-border hotline, service specialists for key enterprises, and provincial and municipal policy service expert teams); comprehensively responding to enhance service precision (integrating data to form "panoramic" growth files for enterprises, providing full-cycle services by start-up, growth, maturity, and transformation stages, and using digital precise profiling to achieve "policy finding people"); and building a matrix layout with diversified products (producing and publishing tax-related new policy interpretations, country-by-country investment tax guides through WeChat official accounts and other channels, and connecting the Belt and Road tax comprehensive service platform with the Jiangsu Belt and Road website and the going global comprehensive service platform for government affairs interoperability).
Appendix "Cross-Border Tax-Related Risk Alerts of the Jiangsu Provincial Tax Service": a 46-item risk "radar chart"
The following is the part of the 2026 Plan most valuable for enterprises' reference. The Jiangsu Provincial Tax Service this time classified cross-border tax-related risks into five major categories totaling 46 items, forming a "risk list" for enterprises' self-assessment. Structurally, transfer pricing remains the largest risk exposure in international tax management (15/46), echoing the "value chain analysis," "cross-border payments," and "cross-border restructuring" among the six major regulatory priorities above; although overseas tax-related information reporting (items 43-46) has only 4 items, it involves new areas such as hidden income from digital currency and offshore trusts, reflecting the Jiangsu Provincial Tax Service's forward-looking supervision of automatic exchange of financial accounts and new cross-border wealth tools.
Comparison of the 2026 Plan with previous annual compliance plans
According to public information from the Jiangsu Provincial Tax Service, since 2014 Jiangsu has continuously issued international tax compliance in the form of "plans" (in earlier years also called "International Tax Compliance Plan for Going Global Enterprises"). Previous releases mostly used an "annual" cycle (such as 2024-2025), while the 2026 Plan is the first to be issued on a "three-year" cycle (2026-2028). Below, by comparing the 2026 Plan with previous plans, we preliminarily explore the evolution of Jiangsu's international tax governance over the past decade. Regulatory philosophy: from "you comply, I manage" to "digital-intelligent supervision + differentiated compliance." Digitalization has risen from a "tool" to an "underpinning." Although previous plans also emphasized "big data analysis" (such as reports in 2022 mentioning relying on big data analysis platforms to serve "going global" enterprises) and "informatization," the overall positioning was "using data to assist management"; the 2026 Plan lists "digital tax governance" as the first of five major philosophies, explicitly proposing to build a "cross-border tax source informatization management system" and an "international tax big data management platform" to achieve cross-border profit level monitoring and risk analysis featuring "human-machine collaboration and the combination of point and surface." This reflects a qualitative change in the Jiangsu Provincial Tax Service's international tax management from "data-assisted" to "digital-intelligence-driven."
It is the first to advocate a "high-level dialogue/headquarters-to-headquarters" communication mechanism. Previously, although Jiangsu proposed "direct dialogue with group headquarters" (such as cooperation with the National Tax Service of Korea and concentrated signing of advance pricing arrangements at the 2024 plan briefing), it had not yet risen to an institutionalized direct channel mechanism between "tax authorities and the pricing decision-making level of group headquarters." The 2026 Plan lists it as one of the five major philosophies and clarifies cross-regional "headquarters-to-headquarters" communication, a landmark breakthrough at the mechanism level, pointing toward more proactive, more upfront tax-enterprise certainty and collaborative governance.
A "differentiated compliance management system" has taken shape. Previous plans mainly used a dual framework of "risk alerts + service guidance"; the 2026 Plan uses two-dimensional standards of "tax loss risk + compliance performance" to clarify a three-tier differentiated regulatory path: "high compliance鈥攃ertainty services, medium-low compliance鈥攕elf-check space, high non-compliance鈥攑rogressive enforcement," pushing international tax management from "one-size-fits-all" management to precise governance featuring "graded classification and combining leniency with strictness," and aligning more closely with the internationally common concept of "cooperative compliance."
Replacement of old and new regulatory priorities and deepening
The 2026 Plan adds content on the "Pillar Two" global minimum tax. Previous editions did not contain "Pillar Two" content, and it is listed first among the six major regulatory priorities, supported by facts such as "more than 70 jurisdictions have legislated and the United States has a parallel arrangement," indicating that the impact of the global minimum tax international tax reform has substantively entered the regulatory and service agenda of Chinese local tax authorities, hitting the compliance issue of greatest concern to large multinational enterprises. "Value chain analysis" has changed from auxiliary to a key lever: previous plans mostly focused on conventional issues such as the arm's length principle, comparables, and tax haven avoidance for transfer pricing; the 2026 Plan specifically establishes a "value chain analysis" priority, emphasizing using a value chain perspective to make up for the limitations of traditional transfer pricing methods, exploring the value chain profit split method, and strengthening disclosure and cross-verification of value chain data. Refinement of the granularity of risk points: overseas profit retention (CFC), key review of cross-border outbound payments, substantive determination of treaty "beneficial owner" and determination of "treaty shopping" purpose, and cross-border restructuring of equity and intangible assets (including indirect transfers of Chinese taxable assets) are all given more specific and systematic compliance requirements and regulatory paths than before, reflecting a significant refinement in the Jiangsu Provincial Tax Service's regulatory granularity in existing risk areas. Evolution of appendix-type risk lists: from "several typical" to a "46-item structured list." The "typical risks" flagged in previous plans were relatively scattered and described in a more principled manner (for example, the 2024-2025 edition had "several typical risks and 14 measures to assist enterprises and benefit the people"). The 2026 Plan systematizes 46 risks in an appendix and divides them into five major categories, unfolding each item according to the logic of "behavior鈥攙iolation of tax law鈥攔isk consequence," forming a structured "risk list." This change shows that the plan has moved from "philosophy advocacy" to "executable, benchmarkable operational guidance"; tax authorities' "risk alerts" have moved from "empirical reminders" to "rule-based, list-based, and standardized"; for taxpayers, the 46-item risk list is equivalent to a "cross-border tax compliance assessment form and radar chart" that can be directly used for enterprises' self-assessment of cross-border tax-related risks and internal control development.
Impact of the 2026 Plan on enterprises
The International Tax Compliance Plan of the Jiangsu Provincial Tax Service of the State Taxation Administration (2026-2028) is a work plan that links the past and the future as Jiangsu's international tax governance deepens from an "annual compliance guide" into a "three-year systematic plan." Compared with previous plans, its changes are reflected in five dimensions: in planning cycle, it has been upgraded from "annual/cross-year" to a "three-year strategic framework"; in guiding principles, it establishes a complete logic of "digital-intelligence empowerment + differentiated compliance + high-level dialogue + internal and external coordination"; in content, it adds two frontier priorities, "Pillar Two" and "value chain analysis"; in services, it achieves an upgrade of "branding + full cycle + classification"; and in supporting materials, it strengthens operational benchmarking value with a structured "46-item risk" list. For multinational enterprises and non-resident enterprises investing or operating in Jiangsu, the important signal released by the 2026 Plan is that the Jiangsu Provincial Tax Service will be more inclined to communicate directly with group headquarters, carry out "ex ante certainty" services in a more intensive manner, and implement more refined supervision over overseas income and asset movements.
Conclusion
PwC recommends that "going global" enterprises pay particular attention to six regulatory priorities: Pillar Two compliance obligations, value chain disclosure in transfer pricing contemporaneous documentation, overseas profit retention and dividend arrangements, beneficial review of outbound payments, "substance over form" determination of treaty benefits, and pricing of cross-border asset restructuring. Enterprises should proactively conduct compliance self-checks in accordance with the "46-item risk list"; at the same time, they should fully utilize certainty service tools such as advance pricing arrangements, the International Tax Collaborative Management Service Agreement, the 12366 cross-border hotline, and overseas park service points to achieve a shift from "passive response" to "active compliance." In addition, the working direction of "certainty first, combining leniency with strictness" proposed by the Jiangsu Provincial Tax Service also provides predictable institutional dividends for multinational enterprises with high-level compliant operations.
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