China Regulatory Brief: China Malaysia Tax Agreement and National People’s Congress Passes Key Laws

China and Malaysia sign tax agreement

On November 1, 2016, the Director of the State Administration of Taxation of China (SAT) and the Secretary General of the Malaysian Ministry of Finance signed an exchange letter between the government of the People’s Republic of China and the government of Malaysia on the Agreement on Taxation. The document further clarifies matters concerning tax exemptions detailed in the Tax Agreement between China and Malaysia, and will act to reduce the tax burden and financing cost of cross-border taxpayers between the two countries. The meeting between China and Malaysia also covered topics such as education, agriculture, customs, and defense, and served to encourage cooperation, stability, and development between the two countries.

Nine regions raised minimum wage standards

The Ministry of Human Resources and Social Security (MOHRSS) held a press conference on October 25, 2016, in which the topic of minimum wage standards was discussed. The nine regions of Liaoning, Jiangsu, Chongqing, Shanghai, Hainan, Shandong, Tianjin, Hebei, and Beijing have raised their wage standards, with an average growth rate of 10.7 percent. Adjustments were made by late September, with Shanghai in possession of the highest monthly minimum wage standard, at RMB 2,190, while Beijing has the highest hourly minimum wage standard of RMB 21. The conference also touched on the adjustment and payment of the old-age pension system. Unification of the pension system has been initiated, and 20 provinces and cities have fully integrated urban and rural residents’ medical insurance.

RELATED: Tax and Compliance Services from Dezan Shira & Associates

Hong Kong to automatically exchange financial account and tax information with Japan and UK in 2018

Hong Kong has signed agreements with Japan and the UK with an aim to initiate the automatic exchange of financial account information in tax matters with the two tax jurisdictions in 2018. Hong Kong’s Inland Revenue Department (IRD) has already signed bilateral competent authority agreements with Japan and the UK, and has inserted these tax jurisdictions into the list of ‘reportable jurisdictions’ under its Inland Revenue Ordinance, which includes all 100 jurisdictions committed to adopting the account information exchange system. Agreements with Japan and the UK will lead the way for other jurisdictions committing, which will be instrumental for Hong Kong to maintain its status as a premier international financial center.

NPC  passed several key laws such as cyber security, HKSAR basic law, and marine protection

On November 7, 2016, the National People’s Congress Standing Committee held a meeting to deliberate the passing of the cyber security draft law, film industry promotion law, draft amendments to the marine environment protection act, private education encouragement law and the draft interpretation of Article 104 of the Basic Law of the Hong Kong Special Administrative Region. Many effects of these laws are welcomed by investors, as they introduce further transparency into the industries. Meanwhile, Beijing’s interpretation of Hong Kong’s Basic Law is poised to add friction to the already strained relationship between Hong Kong and the mainland.

Tax, 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.
An 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

Human 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.

• Previous Article China Regulatory Brief: Adjustments to Tobacco Tax and Private Investment into Water and Gas Supply
• Next Article China Regulatory Brief: Transition Period for Cross Border e-Commerce Extended and Internet Security and Private Education Laws Adopted