China Parent + US Sub: Related-Party Payments Checklist
ChinaUS intercompany payments need contracts, invoices, and ledgers—often tied to Form 5472 and clean books. YCL Cary/RTP + Shanghai intercompany complianceFree Consultation.
Related-party payments between a China parent and US subsidiary should be documented as a system: written contracts, invoices, approvals, payment evidence, and a ledger that agrees to the bank. Define the business purpose, service period, currency, and responsible entity before money moves.
Keep intercompany charges separate from shareholder withdrawals. Review loans, capital contributions, management fees, reimbursements, royalties, and cost allocations. Foreign-owned US corporations and LLCs taxed as corporations may have Form 5472 information-reporting obligations; the correct treatment depends on facts and tax classification. Coordinate the books with federal and state filings, withholding analysis, and transfer-pricing documentation where relevant.
Checklist: make an entity chart; reconcile both sides of every balance; retain contracts and invoices; explain unusual payments; close monthly; and have a CPA review Form 5472 and related returns. YCL Cary/RTP + Shanghai can support bilingual documentation and compliance planning. Free Consultation available. General information only; verify current law and facts with a licensed professional.
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