Finance, Tax and Accounting

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 →

Posted in Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update, South China | Tagged China Guangzhou VAT, China Tax, China Value Added Tax, China VAT Small-scale Taxpayer, Guangzhou, Online VAT Declaration, South China, Telephone VAT Declaration, VAT Declaration | Leave a comment

China Continues Offering Tax Incentives to Animation Industry

Jan. 19 – As part of its support for emerging cultural industries, China’s Ministry of Finance and State Administration of Taxation recently announced their intentions to continue the favorable value-added tax (VAT) and business tax (BT) treatment to the animation industry.

According to the “Circular on VAT and BT Policies that Support the Development of the Animation Industry (caishui [2011] No.119)” released on December 27, 2011, qualified animation developers can enjoy a VAT refund and a reduced BT rate. Continue reading →

Posted in Business, Culture and History, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update | Tagged China Animation Industry, China Animation Production, China Animation Software, China Business Tax, China Copyright Transfer, China Cultural Industries, China Tax, China Value Added Tax, China VAT Refund | Leave a comment

China Specifies VAT Treatment for Sale of Self-used Fixed Assets

Jan. 17 – When selling self-used fixed assets, certain general value-added tax (VAT) payers under specific circumstances can use the simplified method to calculate their VAT payment, says the State Administration of Taxation (SAT) on January 6.

According to the “Announcement on VAT Issues Concerning the Sale of Self-used Fixed Assets by VAT General Taxpayers (SAT Announcement [2012] No.1),” for a VAT general taxpayer which sells its self-used fixed assets and falls under two specific circumstances (listed below), VAT may be charged at the tax rate of 4 percent and then reduced by half using the simplified calculation method (which does not allow input VAT to be deducted from output VAT). The VAT general taxpayer shall not issue a VAT Special Invoice when this specific VAT charge takes place. Continue reading →

Posted in Business, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update | Tagged China Fixed Assets, China Tax, China Used Fixed Assets VAT, China Value Added Tax, China VAT General Taxpayer, State Administration of Taxation | Leave a comment

China Expat Tax Filing and Declarations for 2011 Income

Jan. 16 – Individuals residing in China are subject to individual income tax (IIT) and expatriates who are employed by a foreign-invested enterprise in China are liable for IIT from the first day they arrive in China.

IIT is normally withheld from wages or salaries by employers and paid to the tax authorities on a monthly basis (within 15 days of the end of each month). At the end of the year, an annual IIT declaration should be submitted to tax authorities within three months of the end of the previous calendar year (i.e., between January 1, 2012 and March 31, 2012 for the 2011 calendar year). Penalties for late filing can be up to five times the amount that was due. Continue reading →

Posted in Business, Featured, Finance, Tax and Accounting | Tagged China Briefing Magazine, China IIT, China Individual Income Tax, China Individual Income Tax Calculation, China Tax, China Tax Declarations, China Tax Filing, China Tax Rates, Employment Benefits, Tax Deductions | 4 Comments

China Urges Financial Industries to Serve Real Economy

Jan. 13 – The two-day financial planning meeting held over the past weekend in Beijing has provided direction for China’s financial sector during the next five years. As part of the plan, financial industries will be used to serve the real economy, offering more credits to productive businesses that actually create most of the country’s new jobs and wealth. Financing channels will be further diversified, with the potential launch of new financial products.

For the future, China must improve the real economy’s access to finance and prevent over-speculation as well as virtual bubbles from inflating the economy, Chinese Premier Wen Jiabao said at the meeting. Continue reading →

Posted in Economy and Politics, Finance, Tax and Accounting | Tagged China Banking Sector, China Bond Market, China Corporate Bonds, China Financial Sector, China Inflation, China Institutional Investors, China International Board, China Loans, China Local Government Bonds, China Real Economy, China Securities Market, China Stock Market | Leave a comment

Beijing Details Foreigners’ Mandatory Social Insurance Participation

Jan. 11 – Following the promulgation of a national decree ordering foreign employees’ mandatory participation in China’s social insurance system, Beijing recently issued its own implementation details in a bid to strengthen the enforcement of the new policy.

On December 20, 2011, the Beijing Social Insurance Fund Management Center (BSIFMC) released the “Circular on Issues Concerning the Improvement of Participation in Social Insurance by Foreigners Employed in Beijing (the new Circular).” The document details issues related to foreigners’ social insurance registration, backdated premium payments, charges of late fees, and the participation of foreigners from those countries that have signed a bilateral or multilateral agreement on social insurance with China. Continue reading →

Posted in Business, Finance, Tax and Accounting, Legal and Regulatory, Northeast China, Regulatory Update | Tagged Beijing, China Regulatory, China Social Insurance Law, Foreigner Social Insurance | 4 Comments

U.S. IRS Reopens Offshore Voluntary Disclosure Program

Jan. 11 – The U.S. Internal Revenue Service (IRS) reopened its Offshore Voluntary Disclosure Program (OVDP) on Monday, giving U.S. citizens with hidden offshore assets another chance to come clean.

The revival of the OVDP follows the closure of the 2011 and 2009 programs, during which around 33,000 voluntary disclosures were made and a total of US$4.4 billion was collected on offshore accounts. Most participants of the new program will be required to pay a penalty of 27.5 percent (compared to the 25 percent penalty in the 2011 program) of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure. Continue reading →

Posted in Finance, Tax and Accounting | Tagged IRS, IRS Offshore Voluntary Disclosure Program, Offshore Account, Tax Evasion, U.S. Tax Law, U.S. Taxpayers | Leave a comment

New Issue of China Briefing: Annual Compliance for FIEs

Of interest to all foreign investors in China, this issue deals with handling your 2011 accounts, including annual compliance procedures, license renewals, and handling tax deductible expenses, corporate and individual income tax filings for 2011 income

Jan. 10 – The new issue of China Briefing Magazine, titled Annual Compliance for FIEs, is out now and immediately available as a complimentary PDF download on the Asia Briefing Bookstore.

In China, January and February bring New Year banquets, transportation chaos…and annual compliance procedures.

Prior to distributing and repatriating profits, foreign-invested enterprises (FIEs) must complete annual compliance, involving an audit, tax filing and inspection. These procedures are not only required by law (and completing them improperly could lead to fines), but are a good opportunity to conduct an internal financial health check.

In this magazine, we take you step-by-step through this process for representative offices, and for joint ventures, wholly-foreign owned enterprises, and foreign-invested commercial enterprises. Continue reading →