According to the preliminary data released by China’s National Bureau of Statistics (NBS), China’s economy expanded 7.8 percent in 2012 amid the sluggish global economy, reaching RMB51.9 trillion (US$8.45 trillion). The growth rate, although the slowest since 1999, still beats the government’s 7.5 percent growth target. ...
Under China’s Corporate Income Tax Law, a non-resident enterprise without an establishment or venue in China is subject to CIT at a withholding rate of 10 percent on their China-sourced income. A non-resident enterprise with an establishment or venue in China is taxable on all of its China-sourced income, as well as non-China sourced income that has an actual connection to the Chinese establishment or site, at 25 percent CIT. ...
This edition of the China Tax Guide, updated for 2013, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in China, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for anyone looking to navigate the complex tax and accounting landscape in China in order to effectively manage and strategically plan their China operations. ...
In this issue of Asia Briefing Magazine, we break down the various types of development zones available in China, India and Vietnam specifically, as well as their key characteristics and leading advantages. We then go on to provide a snapshot of the latest development zones across the rest of Asia. We hope that this issue will provide the basic fundamentals to understanding one of the most important business tools available to international businesses operating in Asia. ...
This month’s China Briefing Magazine casts some light on permanent establishment status in China by discussing the circumstances triggering a PE in China, focusing on Service PEs. We also discuss the tax implications for a non-resident enterprise where its activities in China constitute a Service PE in the country, and address the taxation of representative offices. ...
May 21 – China’s State Administration of Foreign Exchange (SAFE) released the “Circular on Administrative Measures for Foreign Debt Registration (huifa [2013] No.19, hereinafter referred to as ‘Circular’)” on April 28, which came into effect on May 13, 2013. Five distinct features of the Circular can be found below. Continue Reading
May 20 – With the view to encourage private investment in the insurance industry, China’s Insurance Regulatory Commission (CIRC) released the “Circular on Relevant Issues regarding the Investment and Shareholding of Limited Partnership Equity Investment Enterprises in Insurance Companies (Baojianfa [2013] No. 36, hereinafter referred to as the ‘Circular’)” on April 24, which allows limited partnership equity investment enterprises to invest in the country’s insurance companies.
The Circular sets out the requirements for a limited partnership equity investment enterprise to invest in an insurance company and outlines the application materials required by the CIRC. The Circular applies to all Chinese insurance companies in which the shareholding of all foreign investors is less than 25 percent, as well as domestic and foreign-invested limited partnership equity investment enterprises. Detailed information can be found below. Continue Reading
By Eunice Ku and Shirley Zhang
May 20 – With an increasing number of foreign enterprises starting to conduct business in China, tax liabilities resulting from business activities within the country are fast becoming an issue of key concern. If an establishment or venue of a non-resident enterprise constitutes a service permanent establishment (PE) in China, it will be subject to 25 percent CIT on all of its China-sourced income, as well as non-China sourced income that has an actual connection to the PE. We outline what constitutes a service permanent establishment in the current issue of China Briefing Magazine “Understanding Permanent Establishments in China,” which is available as a complimentary download on the Asia Briefing Bookstore through the end of the month. Continue Reading
May 17 – In order to fully implement the “Regulations on Work-Related Injury Insurance (hereinafter referred to as ‘Regulations’),” China’s Ministry of Human Resources and Social Security (MOHRSS) released the “Opinions on Certain Issues Concerning the Implementation of the Regulations on Work-Related Injury Insurance (Renshebufa [2013] No.34, hereinafter referred to as the ‘Opinions’)” on April 25, 2013, which clarifies several issues regarding the implementation of the Regulations. Detailed information can be found below. Continue Reading
Regional demographics mean China must cozy up to India or face consequences
Op-Ed Commentary: Chris Devonshire-Ellis
May 17 – Quite possibly the most senseless foreign policy position China has taken over the years has been its stance towards Japan. With diplomacy concentrating on World War II issues that most of the world has now moved on from, sovereignty disputes over close to worthless islands, and a rise of Chinese nationalism fueled by state propaganda, China has succeeded in alienating what remains one of the world’s largest economic powers, as well as a major historic foreign investor in China and a close regional neighbor. While Japanese investment will remain in China, the fallout from the Chinese government-fueled drop off in Japanese sales to China has made the Japanese business community now feel unwelcome in the country. Consequently, future Japanese investment is looking for more sustainable, and friendly, investment relations across the rest of Asia. Continue Reading
May 16 – China’s National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOC) jointly released the “Catalogue of Priority Industries for Foreign Investment in Central and Western China (hereinafter referred to as the ‘Catalogue’)” on May 14, which is scheduled to take effect on June 10, 2013. The Catalogue replaces its predecessor issued in 2008, and adds 173 categories to the original list.
According to the “Provisions on Guiding Foreign Investment,” foreign-invested projects included in the Catalogue are entitled to the preferential policies granted for the foreign-invested projects under the encouraged category. The Catalogue is organized by province, covering 22 out of the 31 provincial-level administrative regions in Mainland China. Selected industries for each provincial-level region can be found below. Continue Reading
Three-fourths of China’s provinces reported GDP figures over RMB1 trillion (US$163 billion) in 2012
By Yao Lu
May 16 – According to preliminary data released by China’s National Bureau of Statistics, the country’s economy expanded 7.8 percent in 2012 amid the sluggish global economy, reaching RMB51.9 trillion (US$8.45 trillion). The growth rate, although the slowest since 1999, still beats the government’s 7.5 percent growth target. In the fourth quarter of 2012, the country’s economic growth reached 7.9 percent, putting an end to seven consecutive quarters of slowdown, up from 7.4 percent in the third quarter and 7.6 percent in the second. Continue Reading
By Eunice Ku and Shirley Zhang
May 15 – For foreigners doing business in China, tax is always a key concern. As a foreign business or individual, income derived from China may be subject to taxes in both your home country and China, which could substantially increase your tax burden.
Under China’s Corporate Income Tax (CIT) Law, a non-resident enterprise (i.e., an enterprise organized outside of China and whose effective management is not within China) without an establishment or venue in China is subject to CIT at a withholding rate of 10 percent on their China-sourced income, which includes:
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