Finance, Tax and Accounting

Citibank Permitted to Issue Credit Cards in China

Greater market access to China’s banking industry on the road ahead?

Feb. 8 – U.S.-based financial services corporation Citigroup announced on Monday that it has obtained government approval to issue its own credit cards in China. It is hoped that Beijing’s recent decision indicates that the country will be more willing to open up its banking industry to foreign financial institutions in the near future.

Citigroup – operating 13 corporate bank branches and 46 consumer outlets in the world’s most populous nation – is the first Western bank authorized to issue credit cards in Mainland China. Hong Kong-based Bank of East Asia, the only other non-mainland credit card issuer in the country, was allowed to tap into the China market back in 2008. Continue reading →

Posted in Business, FDI and Foreign Trade, Finance, Tax and Accounting | Tagged China Banking, China e-Payment Market, Citibank China Credit Cards, Citigroup | Leave a comment

Liquidating a China Business

Tax, financial and regulatory compliance considerations when closing a foreign-owned business in China

Feb. 8 – Many foreign businesses in China do very well and are profitable. However, there will always be some that do not succeed commercially, or that may have to close because of external circumstances affecting their parent company overseas.

There are of course regulations under Chinese law for how these liquidation processes should properly be carried out to ensure that the company’s final bills are settled, tax is paid, and all the company’s remaining liabilities and statutory responsibilities are correctly discharged. In this article, we explain the procedures you would need to go through to close a foreign invested enterprise in China, and highlight the many related issues that you will need to address. Continue reading →

Posted in Business, Featured, Finance, Tax and Accounting, Legal and Regulatory | Tagged China Company Law, China Legal, China Liquidation, China Relocation, Closing in China | Leave a comment

Taxation on Real Estate Rental Income in China

Including city-specific details on Chengdu, Guangzhou and Shenzhen

Feb. 7 – Both Chinese nationals and a foreign individuals are subject to a combination of taxes on real estate rental income: including individual income tax (IIT), business tax (BT), property tax (PT), urban maintenance and construction tax (UMCT) and an education surcharge (ES).

If simply left to adding up all those rates according to each specific tax law, the taxation on individual rental income would end up pretty high. However, in a move to energize China’s housing supply market, the Chinese government began offering some tax incentives starting in 2008. Continue reading →

Posted in Central China, Finance, Tax and Accounting, Legal and Regulatory, South China | Tagged China Business Tax, China Chengdu, China Education Surcharge, China Guangzhou, China Individual Income Tax, China Individual Rental Income, China Individual Rental Tax, China Property Tax, China Shenzhen, China Urban Maintenence and Construction Tax | Leave a comment

China Grants Tax Incentives to Logistics Industry

Feb. 6 – In a move to further boost its logistics industry, China is now allowing logistics enterprises to pay less urban land use tax (ULUT) on lands occupied by their commodity warehouses.

According to the “Circular on the ULUT Policy Concerning the Lands Occupied by Logistics Enterprises’ Commodity Warehousing Facilities (caishui [2012] No. 13)” co-issued by the Chinese Ministry of Finance and State Administration of Taxation, between January 1, 2012 and December 31, 2014, land occupied by a logistics enterprise’s self-owned commodity warehousing facilities (for both self-use and renting out) are subject to 50 percent of the ULUT those enterprises were originally supposed to pay based on related regulations. Continue reading →

Posted in Business, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update, Shipping & Logistics | Tagged China Logistics, China Logistics Industry, China Shipping, China Urban Land Use Tax, China Warehousing Facilities | Leave a comment

China Announces Import Tax Treatment to ‘Encouraged’ Foreign-Invested Projects

Feb. 2 – In Announcement [2012] No. 4 released on January 29, the Chinese General Administration of Customs clarified the favorable import tax treatment to “encouraged” foreign-invested projects (FIPs).

Starting on January 30, FIPs (including capital increases to FIPs) listed in the “encouraged” category in the “Foreign Investment Industrial Guidance Catalog (2011 Version)” (“2011 FDI Catalog”) are exempt from customs duties when investors import equipment (for self use) and technology, accessories as well as spare parts that come along with the equipment based on related agreements. However, these importers are still subject to import value-added tax, which was resumed on such imports in 2009. Continue reading →

Posted in FDI and Foreign Trade, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update | Tagged China Customs Duty, China FDI, China General Administration of Customs, China Import Taxes, China Import VAT, China Tax | Leave a comment

Shanghai Offers Fiscal Support to Promote VAT Reform

Jan. 30 – Shanghai’s newly included value-added tax (VAT) payers (pilot enterprises) may be able to receive fiscal compensation if they see increases in their actual tax burdens under the new tax scheme, local authorities said recently.

The focus of the ongoing VAT reform is to reduce duplicate taxation and extend supply chains that are eligible for VAT deductions, the local government emphasized. Continue reading →

Posted in Business, East China, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update | Tagged China VAT, Shanghai Fiscal Compensation to VAT Reform, Shanghai Pilot Taxpayers, Shanghai VAT Reform | Leave a comment

Transfers of Natural Resource Use Rights Subject to Business Tax

Jan. 23 – China’s State Administration of Taxation (SAT) recently clarified the tax treatment towards transfers of natural resource use rights.

According to the “Circular on Business Tax (BT) Policies on Natural Resource Use Right Transfers (caishui [2012] No.6)” issued on January 6, 2012, transfers of natural resource use rights – namely transfers of the rights to explore, exploit and employ natural resources – will be regarded as one type of intangible asset transfers. Continue reading →

Posted in Finance, Tax and Accounting, Legal and Regulatory, Oil & Petroleum, Regulatory Update | Tagged China Business Tax, China Intangible Asset Transfer, China Natural Resource Use Rights Transfer, China Natural Resources, China Tax | Leave a comment

Guangzhou Simplifies Electronic VAT Declaration Procedures

Jan. 19 – Guangzhou’s value-added tax (VAT) small-scale taxpayers are no longer required to submit paper declaration forms when they file electronic VAT declarations.

According to the “Announcement on Canceling Paper Declaration Form Submissions During Small-Scale Taxpayers’ Electronic VAT Declaration (Guangzhou SAT Announcement [2012] No.1),” starting on January 15, VAT small-scale taxpayers that pay VAT based on auditing results and file VAT declarations electronically are not required to submit paper declaration forms anymore. Continue reading →