East China

China’s VAT Reform: General Taxpayer Status and Tax Filing Issues

Dec. 14 – Following the promulgation of two circulars on the pilot project for replacing the imposition of business tax (BT) with value-added tax (VAT) (Circulars No. 110 and 111) in the transport industry and certain modern service sectors in Shanghai, China’s State Administration of Taxation (SAT) recently clarified more issues regarding the VAT reform – including the application of VAT general taxpayer status in the pilot area and VAT filing issues in non-pilot areas.

VAT general taxpayer status application in the pilot area
The SAT issued the “Circular on Relevant Matters in the Recognition of VAT General Taxpayer Status in the Reform to Replace the Imposition of BT with VAT in Shanghai (Circular [2011] No. 65, “Circular”)“ on December 2, 2011. Continue reading →

Posted in Business, East China, Finance, Tax and Accounting, Legal and Regulatory | Tagged China Regulatory, China Tax, China VAT, China VAT Filing, China VAT Small-scale Taxpayer, Shanghai Modern Services, Shanghai Transport Services, Shanghai VAT General Taxpayer Status, Shanghai VAT Reform | Leave a comment

China’s First Tier Cities Compete to Attract Foreign Headquarters

Setting up regional headquarters in Shanghai, Beijing, Guangzhou and Shenzhen

Dec. 8 – China’s first tier cities – faced with various challenges during industrial upgrading and an economic transition – are scrambling to attract foreign-invested enterprises (FIEs) to set up regional headquarters (RHQ) in their jurisdictions.

The cities of Beijing, Shanghai, Guangzhou and Shenzhen have all announced regional incentives to attract foreign RHQs as they try and create cluster effects and optimize resource distribution. Continue reading →

Posted in Business, East China, FDI and Foreign Trade, Legal and Regulatory, South China | Tagged Beijing HQ, China Headquarters, China Regulatory, Guangzhou HQ, Shanghai HQ, Shenzhen HQ | Leave a comment

China’s SAT Details VAT Reform Issues in Shanghai

Nov. 18 – The value-added tax (VAT) reform projected to take place in Shanghai next year will be China’s first step towards resolving the issue of duplicate taxation on goods and services. While in the existing Chinese taxation system, most types of services (with the exception of processing, repair and replacement services) are subject to business tax (BT), the coming reform will make a larger amount of services – mostly provided in Shanghai’s transport sector and several modern service sectors – become VATable rather than BTable. The implementation details on the reform were recently specified in a circular co-issued by the State Administration of Taxation (SAT) and the Ministry of Finance (MoF).

The “Circular on Commencing the VAT Reform (Replacing BT Imposition with VAT Imposition) in Shanghai’s Transport Industry and Several Modern Service Sectors (caishui [2011] No.111)” released on November 16, explains multiple issues including services that become VATable, VAT rates, as well as calculation methods, taxpayer status and favorable VAT treatment to specific services. Continue reading →

Posted in Business, East China, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update, Shipping & Logistics, Technology | Tagged China Reform, China Regulatory, China Tax, China Value Added Tax, Ministry of Finance, Modern Services VAT, Shanghai, Shanghai VAT Reform, State Administration of Taxation, Transport Services VAT, VAT Exemption, VAT Refund | Leave a comment

Shenzhen and Xiamen Further Encourage Equity Investment

Nov. 8 – Local governments of several Chinese coastal cities are offering further incentives to equity investment enterprises, as private equity (PE) investment has emerged as one of the most important capital-raising avenues for small and medium-sized enterprises in those areas.

Shenzhen: PE Development Fund
In order to offer various fiscal incentives to PE funds, Shenzhen established a PE Development Fund (PEDF) and recently clarified the operation procedures for PE funds that intend to apply for the financial support extracted from the PEDF. Continue reading →

Posted in Business, East China, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update, South China | Tagged Equity Investment, Fund-raising, Government Guide Fund, PE Incentives, PE Reward, PE Subsidy, Private Equity, Shenzhen, Xiamen | 3 Comments

Shanghai to Offer Incentives to Shipping-Related Industries

Nov. 7 – As a city striving to become an international shipping center, Shanghai is brewing a complete package of favorable policies for its shipping-related industries. The new policies are hoped to significantly bring down shipping companies’ tax liabilities to levels similar to the shipping tax burdens seen in Hong Kong, experts say.

According to a report by the Shanghai-based newspaper Dongfang Daily, the government of Shanghai’s Pudong New Area – the city’s trading and financial center with high reliance on international shipping – will announce a series of supportive measures to motivate the development of shipping-related industries. The favorable policy package, which includes one-time subsidies, tax subsidies and soft environment improvement, will be offered to both key shipping companies (such as ship operators, shipping companies and logistics companies) and high-end shipping-related service companies (such as finance leasing companies, shipping insurance institutions, shipping information consulting institutions, shipping brokers, shipping-related legal service institutions and maritime training institutions). Continue reading →

Posted in Business, East China, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update, Shipping & Logistics | Tagged China Logistics, China Shipping, China Tax, Shanghai International Shipping Center, Shanghai Pudong New Area, Shanghai Shipping One-time Subsidy, Shanghai Shipping Reward, Shanghai Shipping Subsidies, Shanghai Shipping Tax Incentives, Shipping Service Companies | Leave a comment

China to Allow Issuance of Local Gov’t Bonds

China debt institutionalizing as bank default fears loom

Oct. 21 – China’s Ministry of Finance has instigated a trial program that will allow four select local governments to issue bonds directly. To date, this route to raising funds has been banned, however rising debt levels and bank loans about to fall due have made the issue a pressing one for Beijing. Concern over local governments defaulting on debt has prompted the trial. China’s National Audit Office has stated that 25 percent of China’s RMB10.7 trillion (US$1.67 trillion) will fall due by this year end, with about 17 percent due next year and 11 percent in 2013. Continue reading →

Posted in East China, Economy and Politics, Finance, Tax and Accounting, South China | Tagged China Debt, China Default, China Local Governments, Guangdong, Shanghai, Shenzhen, Zhejiang | Leave a comment

China Bails Out Its Banks

Oct. 12 – Beijing has used the state-owned Huijin Sovereign Wealth Fund to purchase stocks in China’s four largest banks – Agricultural Bank of China, Bank of China, Industrial & Commercial Bank of China, and China Construction Bank – in moves made to support the share prices of each of the banks, as well as the markets overall. Huijin is now in the somewhat odd position of owning a controlling stake in each of China’s biggest banks.

Huijin has stepped in to support share prices as markets in Shanghai and Shenzhen have declined significantly over the year, while the banks themselves have been dealing with bad debt issues following Beijing’s policy of providing easy credit terms to support the economy during the Global Financial Crisis in 2008. Continue reading →

Posted in East China, Economy and Politics, Finance, Tax and Accounting, Markets, South China | Tagged Agricultural Bank of China, Bank of China, China Construction Bank, China Finance, Global Financial Crisis, Hong Kong Stock Exchange, Huijin Sovereign Wealth Fund, Industrial & Commercial Bank of China, Shanghai Stock Exchange, Shenzhen Stock Exchange | 2 Comments

Free China Expat Culture Book Download

Sept. 30 – China Expat, China Briefing’s sister site covering all things concerning the interaction between overseas expatriates and Chinese culture, celebrates 10 years of existence this year and has released a complimentary book – “China Expat – A Decade of Writing: 2001-2011” – with a selection of articles contributed to the title over the past decade. The book is launched today both as a anniversary gift to China expats home and abroad, and also to celebrate China’s National Day, which falls on October 1.

“China Expat – A Decade of Writing: 2001-2011” brings together a collection of the published work of four well known expats for the first time in one volume. With articles taken from the archives of the original China Expat magazine, and more recently the online blog from the past 10 years, this collection will provide memories of days gone by, provoke exclamations of “I didn’t know that!” and inspire today’s generation of expats to get out, about and explore. In an age when blogs are mainly blah, the China Expat articles within will provoke, provide food for thought, and raise a wry smile.
Continue reading →