China Regulatory Brief: Adjustments to Tobacco Tax and Private Investment into Water and Gas Supply

Posted by Reading Time: 4 minutes
China-Regulatory-Brief
New VAT policy to be piloted in the customs special supervision zone  

The State Administration of Taxation (SAT), Ministry of Finance (MOF), and General Administration of Customs (GAC) issued an announcement on October 14, 2016 regarding a pilot program in which enterprises operating in customs special supervision zones are granted ordinary VAT taxpayer qualification. The pilot program will be implemented in comprehensive bonded zones in Kunshan, Suzhou, Chongqing, Shenzhen, and Zhengzhou, as well as the export processing zones of Shanghai and Zhengzhou, starting November 1, 2016. Enterprises that meet registration requirements may submit their application to local tax and customs bureaus. For domestic sales of goods (including those sold to other pilot enterprises), a pilot enterprise may issue special VAT invoices and declare for payment of VAT and consumer tax as required.

Opinions regarding amendments to tobacco leaf tax solicited

On October 17, 2016, the State Administration of Taxation issued a draft law on tobacco leaf taxation for opinions. Basic provision is preserved, but adjustments are made to the amount of subsidy offered, now at 10 percent of purchase price, and according to the amount of subsidies granted by taxpayers in different regions. In addition, the draft also revises provision for tax payment time restriction, reducing the period from 30 days to 15 after the tax payment obligation is generated, and where the taxation period is of one month.

Professional Service_CB icons_2015RELATED: Tax and Compliance Services from Dezan Shira & Associates
Preferential import tax policies for integrated circuit manufacturing enterprises

An announcement of implementation of preferential import tax policies for integrated circuit (IC) manufacturing enterprises was jointly made on October 19, 2016 by the State Development & Reform Commission (SDRC), the Ministry of Industry & Information Technology (MIIT), the Ministry of Finance (MOF), and General Administration of Customs. The Announcement furnishes a list of the IC manufacturing enterprises entitled to preferential import tax policies, namely those whose manufactured line width is less than 0.25μm, or with investment exceeding RMB 8 million and line width less than 0.5μm, and will be retrospectively entitled to the terms of the new policy starting from June 1, 2015 and November 20, 2015, respectively.

Private investment into urban water supply and fuel gas encouraged

Opinions have been issued encouraging and guiding private investment into urban water supply, fuel gas, heat supply, sewerage, and waste treatment industries by increasing channels for private investment. The opinions detail that private capital may enter these industries by means of direct investment in the form of wholly foreign-owned enterprises (WFOE), joint ventures (JVs), and the PPP model featuring public-private cooperation as well as participation in state-owned enterprise (SOE) reform and restructuring, equity subscriptions, and industry investment funds. In addition, private enterprises are encouraged to overcome regional and industrial restrictions by assets mergers and enterprise reorganization. In terms of financial services, increased credit support will be extended to private investors, who are encouraged to operate new types of loan businesses, and relevant enterprises will be supported in issuing debt financing instruments of non-financial enterprises. The Opinions were jointly issued by the Ministry of Housing and Urban-Rural Development, the State Development and Reform Commission (SDRC), the Ministry of Finance (MOF), and the Ministry of State-Owned Land & Resources and People’s Bank of China (PBOC).


About
Us

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email china@dezshira.com or visit www.dezshira.com.

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

Related Reading

2016 China tax guideTax, Accounting, and Audit in China 2016
This edition of Tax, Accounting, and Audit in China, updated for 2016, offers a comprehensive overview of the major taxes that 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 CFOs, compliance officers and heads of accounting who must navigate the complex tax and accounting landscape in China in order to effectively manage and strategically plan their China-based operations.
Intro to business China 2016An Introduction to Doing Business in China 2016
Doing Business in China 2016 is designed to introduce the fundamentals of investing in China. Compiled by the professionals at Dezan Shira & Associates in June 2016, this comprehensive guide is ideal not only for businesses looking to enter the Chinese market, but also for companies who already have a presence here and want to keep up-to-date with the most recent and relevant policy changes

HR and payroll 2016Human Resources and Payroll in China 2016-2017
A firm understanding of China’s laws and regulations related to human resources and payroll management is absolutely necessary for foreign businesses in China. This edition of HR and Payroll, updated for 2016/17, navigates China’s laws and regulations related to HR and payroll management – essential information for foreign investors looking to establish or already running a foreign-invested entity in China.