Finance, Tax and Accounting

China to Expand VAT Reform Nationwide Starting August 1, 2013

Apr. 11 – China’s State Council announced yesterday that it will expand the current value-added tax (VAT) reform nationwide and include more industries under the pilot scope.

According to the statement released by the State Council, the VAT reform, which replaces business tax with value-added tax in the transport sector and certain services sectors, will be rolled out nationwide from August 1. Moreover, the film, radio and television industries will also be included in the pilot reform. It is estimated that the widening reform will save companies about RMB120 billion in tax payments this year. Continue reading →

China Cancels Import Duties for Major Technical Equipment

Apr. 8 – With a view to boost domestic demand and promote industrial upgradation across the country, China’s Ministry of Finance, together with three other central departments, released the “Circular on Adjusting the Catalogs Relating to Import Duties for Major Technical Equipment (Caiguanshui [2013] No.14, hereinafter referred to as ‘Circular’)” on March 25, 2013, which scraps import duties and import-related value-added taxes on a range of technical equipment from April 1, 2013. Detailed information can be found below. Continue reading →

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China Releases Administrative Measures on Software Enterprise Recognition

Apr. 1 – With the view to promote the development of the software industry in China, the Ministry of Industry and Information Technology (MIIT), together with three other central departments, released the “Administrative Measures for Software Enterprise Recognition (gongxinbulianruan [2013] No. 64, hereinafter referred to as ‘Measures’)” on February 6, which lists out the requirements for software enterprise recognition in China. Detailed information can be found below. Continue reading →

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New Issue of China Briefing: M&A Regulations in China

Apr. 1 – The new issue of China Briefing Magazine, titled M&A Regulations in China, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the month of April.

Here we return to a popular subject – China’s M&A regulatory framework. With the global economy slowly coming out of recession, and Chinese businesses wanting to expand both domestically and overseas (issues driven by state policy), we expect to see a gradual upswing in the number of M&A deals being conducted with Chinese companies in the forthcoming months.

However, the subject of M&As in China is far from simple, and many important aspects tend to get glossed over. In actuality, there are many issues to be aware of, such as how to stay in compliance with the offshore equity transfer requirements set forth in Circular 698, and how to structure a transaction so as to minimize your tax obligations. These matters should be fully understood by foreign investors when targeting domestic companies. Continue reading →

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Export Tax Rebates in China

Mar. 22 – China began to implement its export tax rebate policy in April 1985 as a way to enhance the country’s competitiveness in foreign markets by eliminating double taxation on exported goods. Export tax rebates refer to refunds of indirect taxes paid by exporting enterprises in the production and distribution process. We discuss China’s value-added tax rebates and consumption tax rebates below. Continue reading →

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China’s SAT Issues FAQs Relating to Tax Payments: Part V

Mar. 22 – China’s State Administration of Taxation (SAT) has recently issued a set of frequently asked questions relating to real estate tax and individual income tax (IIT). The answers provided are based on existing regulations. Detailed information can be found below.

Q: How should foreign-invested enterprises and foreign individuals pay real estate tax?

A: According to the “Notice on Issues Concerning the Collection of Real Estate Tax from Foreign-Invested Enterprises and Foreign Individuals,” starting from January 1, 2009, the collection of real estate tax from foreign-invested enterprises and foreign individuals shall be implemented pursuant to the “Interim Regulations of the People’s Republic of China on Real Estate Tax (guofa [1986] No.90).” Continue reading →

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China Clarifies Issues Relating to Policy-Based Enterprise Relocation

Mar. 21 – China’s State Administration of Taxation (SAT) released the “Announcement on Issues Concerning Income Tax for the Policy-Based Relocation of Enterprises (Announcement [2013] No.11, hereinafter referred to as the ‘Announcement’) on March 20, 2013, which aims to address any issues that crop up during the implementation of the “Administrative Measures on Income Tax for the Policy-Based Relocation of Enterprises.”

On August 10, 2012, China’s SAT released the “Administrative Measures on Income Tax for the Policy-Based Relocation of Enterprises (Announcement [2012] No.40, hereinafter referred to as the ‘Measures’),” which took effect on October 1, 2012. The Measures offer preferential tax treatment for enterprises involved in policy-based relocation. Furthermore, such enterprises are entitled to relocation compensation from the government and other related entities. Detailed information can be found below. Continue reading →

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China’s SAT Introduces Online Electronic Invoicing System

Mar. 15 – China’s State Administration of Taxation (SAT) recently promulgated the “Administrative Measures for Online Electronic Invoices (SAT Order No.30, hereinafter referred to as the ‘Measures’),” which standardizes the issuance and use of online electronic invoices (or “fapiao”). The Measures will come into effect on April 1, 2013. The system serves the dual purpose of enhancing efficiency for taxpayers in terms of the tax declaration and for tax authorities in terms of tax administration. Continue reading →

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