China - Guernsey Tax Treaty

AGREEMENT BETWEEN

THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND

THE GOVERNMENT OF GUERNSEY FOR

THE EXCHANGE OF INFORMATION RELATING TO TAXES

WHEREAS the Government of the People’s Republic of China and the Government of Guernsey (hereinafter referred to as “the Parties”) wish to facilitate the exchange of information relating to taxes;

WHEREAS it is acknowledged that the Government of Guernsey has the right, under the terms of the Entrustment from the United Kingdom of Great Britain
and Northern Ireland, to negotiate, conclude, perform and terminate a tax
information exchange agreement with the Government of the People’s Republic of China;

WHEREAS the Government of Guernsey on the 21st February 2002 entered
into a political commitment to the OECD’s principles of effective exchange of information;

NOW, therefore, the Parties have agreed to conclude the following
Agreement which contains obligations on the Parties only:

ARTICLE 1 SCOPE OF AGREEMENT

      The   competent   authorities   of   the   Parties   shall

provide assistance through exchange of information that is foreseeably relevant to the
administration and enforcement of the domestic laws of the Parties concerning taxes
covered by this Agreement, including information that is foreseeably relevant to the
determination, assessment and collection of such taxes, the recovery and enforcement of tax claims, and the investigation or prosecution of tax matters.

      Information  shall  be  exchanged  in  accordance  with  the

provisions of this Agreement and shall be treated as confidential in the manner provided in Article 8.

ARTICLE 2 JURISDICTION

      The requested Party is not obligated to provide information which

is neither held by its authorities nor in the possession of nor obtainable by persons who are within its territorial jurisdiction.

      To enable this Agreement to be implemented, information shall be

provided in accordance with this Agreement by the competent authority of the requested Party:

(a) without regard to whether the person to whom the information
relates is a resident, national or citizen of a Party, or whether the person by
whom the information is held is a resident, national or citizen of a Party; and

(b) provided that the information is present within the territory of
the requested Party, or in the possession of or obtainable by persons who are
within its territorial jurisdiction.

ARTICLE 3 TAXES COVERED

      The taxes covered by this Agreement are all taxes imposed by

either Party as of the date of entry into force of this Agreement except customs duties or tariffs.

      This  Agreement  shall  also  apply  to  any  identical  or

substantially similar taxes imposed by either Party after the date of entry into force of this Agreement in addition to, or in place of, any of the taxes referred to in paragraph 1.

      The competent authorities of the Parties shall notify each other

of any substantial changes to the taxation and related information gathering measures which may affect the obligations of the Parties pursuant to this Agreement.

      The taxes covered by this Agreement may be expanded or modified by

mutual agreement of the Parties.

ARTICLE 4 DEFINITIONS

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      In this Agreement:
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(a) “the People’s Republic of China”, when used in a geographical sense, means all the territory of the People’s Republic of China, including its territorial sea, in which the Chinese laws relating to taxation apply, and any area
beyond its territorial sea, within which the People’s Republic of China has sovereign rights and jurisdiction of exploration for and exploitation of resources of
the seabed and its sub-soil and superjacent water resources in accordance with international law and its domestic law;

(b) “Guernsey”, when used in a geographical sense, means Guernsey, Alderney and Herm, including the territorial sea adjacent to those islands, in accordance with international law;

(d) “company” means any body corporate or any entity that is
treated as a body corporate for tax purposes;

(e) “competent authority” means,

(i) in the case of the People’s Republic of China, the State Administration of Taxation or its authorized representative; and

(ii) in the case of Guernsey, the Director of Income Tax or his delegate;

(f) “information” means any fact, statement, document or record in whatever form;

(g) “information gathering measures” means judicial, regulatory or
administrative laws and procedures enabling a Party to obtain and provide the
information requested;

(h) “person” means a natural person, a company or any other body
or group of persons;

(i) “public collective investment fund or scheme” means any collective investment fund or scheme, in which the purchase, sale or redemption of shares
or other interests is not implicitly or explicitly restricted to a limited group of investors;

(j) “publicly traded company” means any company whose principal class of shares is listed on a recognised stock exchange provided its listed shares can be readily purchased or sold by the public. Shares can be purchased or sold “by the public” if the purchase or sale of shares is not implicitly or
explicitly restricted to a limited group of investors; and for this purpose, the term “principal class of shares” means the class or classes of shares representing a majority of the voting power and value of the company. For the purposes of this
sub-paragraph the term “recognised stock exchange” means:

(i) in the People’s Republic of China:

the Shanghai Stock Exchange or the Shenzhen Stock Exchange;

(ii) in Guernsey:

the Channel Islands Stock Exchange;

(iii) any other stock exchange which the competent authorities
agree to recognize for the purposes of this sub-paragraph;

(k) “requested Party” means the Party to this Agreement which is
requested to provide or has provided information in response to a request;

(l) “requesting Party” means the Party to this Agreement submitting a request for or having received information from the requested Party;

(m) “tax” means any tax covered by this Agreement.

      As regards the application of this Agreement at any time by a

Party, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the laws of that Party, any meaning under the applicable tax laws of that Party prevailing over a meaning given to the term under other laws of that Party.

ARTICLE 5

EXCHANGE OF INFORMATION UPON REQUEST

      The  competent  authority  of  the  requested  Party  shall

provide upon request in writing information for the purposes referred to in Article 1. Such information shall be exchanged without regard to whether the requested Party needs such information for its own tax purposes or the conduct being investigated would constitute a tax offence under the laws of the requested Party if it occurred in the territory of the requested Party. If the information received by the competent authority of the requested Party is not sufficient to

enable it to comply with the request for information, it shall
advise the competent authority of the requesting Party of that fact and request such additional information as may be required to enable the effective processing of the request.

      If the information in the possession of the competent authority of

the requested Party is not sufficient to enable it to comply with the request for information, the requested Party shall use, at its own discretion, all relevant
information gathering measures necessary to provide the requesting Party with the
information requested, notwithstanding that the requested Party may not need such information for its own tax purposes.

      If specifically requested by the competent authority of the

requesting Party, the competent authority of the requested Party shall provide information under this Article, to the extent allowable under its domestic laws, in the form of depositions of witnesses and authenticated copies of original records.

      Each  Party  shall  ensure  that  its  competent  authority,  for

the purposes of this Agreement, has the authority, subject to the terms of Article 1, to
obtain and provide upon request:

(a) information held by banks, other financial institutions,
and any person, including nominees and trustees, acting in an agency or fiduciary capacity;

(b) (i) information regarding the beneficial ownership
of companies, partnerships, foundations and other persons, including in the case of collective investment schemes, information on shares, units and other interests;

(ii) in the case of trusts, information on settlors, trustees and beneficiaries.

      Notwithstanding  the  preceding  paragraphs,  this  Agreement

does not create an obligation on the Parties to obtain or provide ownership information
with respect to publicly traded companies or public collective investment funds or schemes, unless such information can be obtained without giving rise to disproportionate difficulties.

      Any request for information shall be formulated with the greatest

detail possible and shall specify in writing:

(a) the identity of the person under examination or investigation;

(b) the period for which the information is requested;

(d) the tax purposes for which the information is sought;

(e) the reasons for believing that the information requested is foreseeably relevant to tax administration and enforcement of the requesting Party, with respect to the person identified in sub-paragraph (a) of this paragraph;

(f) the grounds for believing that the information requested is
present in the requested Party or is in the possession of or obtainable by a person within the jurisdiction of the requested Party;

(g) to the extent known, the name and address of any person
believed to be in possession of or able to obtain the information requested;

(h) a statement that the request is in conformity with this Agreement and the laws and administrative practices of the requesting Party, and that if the requested information was within the jurisdiction of the requesting Party then the competent authority of the requesting Party would be able to obtain
the information under the laws of the requesting Party or in the normal course of administrative practice;

(i) a statement that the requesting Party has pursued all means available in its own territory to obtain the information, except those that would
give rise to disproportionate difficulties.

ARTICLE 6

TAX EXAMINATIONS OR INVESTIGATIONS ABROAD

      With  reasonable  notice,  a  Party  may  allow  representatives

of the competent authority of the other Party to enter the territory of the
first-mentioned Party, in accordance with its domestic laws, to interview individuals and examine records with the written consent of the persons concerned. The competent
authority of the second-mentioned Party shall notify the competent authority of the first-mentioned Party of the time and place of the meeting with the individuals concerned.

      At the request of the competent authority of one Party, and in

accordance with its domestic laws, the competent authority of the other Party, may allow representatives of the competent authority of the first-mentioned Party to be present at the appropriate part of a tax examination in the second-mentioned Party.

      If the request referred to in paragraph 2 is acceded to, the

competent authority of the Party conducting the examination shall, as soon as possible,
notify the competent authority of the other Party about the time and place of the examination, the authority or official designated to carry out the examination and the procedures
and conditions required by the first-mentioned Party for the conduct of the examination. All decisions with respect to the conduct of the tax examination shall be made by the Party conducting the examination.

      For  the  purposes  of  this  Article,  the  term  “domestic

laws” refers to laws or instruments governing entry into, or exit from, the territories of the Parties.

ARTICLE 7

POSSIBILITY OF DECLINING A REQUEST

      The competent authority of the requested Party may decline to

assist:

(a) where the request is not made in conformity with this Agreement;

(b) where the requesting Party has not pursued all means available
in its own territory to obtain the information, except where recourse to such means would give rise to disproportionate difficulties; or

(c) where the disclosure of the information requested would be contrary to public policy (“ordre public”) of the requested Party.

      This  Agreement  shall  not  impose  upon  a  requested  Party

any obligation to provide items subject to legal privilege, or any trade, business, industrial, commercial or professional secret or trade process. Information described in paragraph 4 of Article 5 shall not by reason of that fact alone be treated as such a secret or trade process.

      A request for information shall not be refused on the ground that

the tax claim giving rise to the request is disputed by the taxpayer.

      The  requested  Party  shall  not  be  required  to  obtain  and

provide information which, if the requested information was within the jurisdiction of the
requesting Party, the competent authority of the requesting Party would not be able to obtain under its laws or in the normal course of administrative practice.

      The requested Party may decline a request for information if the

information is requested by the requesting Party to administer or enforce a provision of the tax law of the requesting Party, or any requirement connected therewith, which
discriminates against a national, citizen or resident of the requested Party as compared with a national, citizen or resident of the requesting Party in the same circumstances.

ARTICLE 8 CONFIDENTIALITY

      All information provided and received by the competent authorities

of the Parties shall be kept confidential.

      Such  information  shall  be  disclosed  only  to  persons  or

authorities (including courts and administrative bodies) in the jurisdiction of the Parties
officially concerned with the purposes specified in Article 1 and used by such persons or authorities only for such purposes, including the determination of any appeal. For these purposes, information may be disclosed in public court proceedings or in judicial decisions.

      Such information may not be used for any purpose other than for

the purposes stated in Article 1 without the express written consent of the competent authority of the requested Party.

      Information  provided  to  a  requesting  Party  under  this

Agreement may not be disclosed to any other jurisdiction.

ARTICLE 9 SAFEGUARDS

The rights and safeguards secured to persons by the laws or administrative practices of the requested Party remain applicable to the extent that they do not unduly prevent or delay effective exchange of information.

ARTICLE 10 ADMINISTRATIVE COSTS

Unless the competent authorities of the Parties otherwise agree, ordinary costs incurred in providing assistance shall be borne by the requested Party, and
extraordinary costs in providing assistance (including costs of engaging external advisors in
connection with litigation or otherwise) shall be borne by the requesting Party. The respective competent authorities shall consult from time to time with regard to this Article, and in particular the competent authority of the requested Party shall consult with the competent authority of the requesting Party in advance if the costs of providing information with respect to a specific request are expected to be significant.

ARTICLE 11 LANGUAGE

Requests for assistance and responses thereto shall be in English.

ARTICLE 12

MUTUAL AGREEMENT PROCEDURE

      Where    difficulties    or    doubts    arise    between    the

Parties regarding the implementation or interpretation of this Agreement, the respective competent authorities shall use their best efforts to resolve the matter by mutual agreement.

      In   addition   to   the   endeavours   referred   to   in

paragraph 1, the competent authorities of the Parties may mutually agree on the procedures to be used under Articles 5, 6 and 10.

      The  competent  authorities  of  the  Parties  may  communicate

with each other directly for the purposes of this Agreement.

      The Parties may also agree in writing on other forms of dispute

resolution should this become necessary.

ARTICLE 13

MUTUAL ASSISTANCE PROCEDURE

If both competent authorities of the Parties consider it appropriate
to do so they may agree to exchange technical know-how, develop new audit techniques, identify new areas of non-compliance, and jointly study non-compliance areas.

ARTICLE 14 ENTRY INTO FORCE

The Parties shall notify each other in writing that they have completed their internal legal procedures necessary for the entry into force of this Agreement. This Agreement shall enter into force 30 days after the date of receipt of the latter notification, and shall have effect in respect of all charges to tax arising on or after January 1ˢᵗ of the year following that in which this Agreement enters into force.

ARTICLE 15 TERMINATION

      This Agreement shall remain in force until terminated by either

Party.

      Either  Party  may  terminate  this  Agreement  by  giving  notice

of termination in writing. Such termination shall become effective on the first day
of the month following the expiration of a period of six months after the date of receipt of notice of termination by the other Party.

      If this Agreement is terminated, the Parties shall remain bound by

the provisions of Article 8 with respect to any information obtained under this Agreement. All requests received up to the effective date of termination shall be dealt with in accordance with the terms of this Agreement.

IN WITNESS WHEREOF, the undersigned, being duly authorised by the
respective Parties, have signed this Agreement.

DONE at in duplicate this
day of 2010, in the Chinese and English languages, both texts being equally authentic.

For the Government of the For the Government of

People’s Republic of China
Guernsey

China - Guernsey Tax Treaty

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