Tax & Accounting

Export Tax Rebates in China

Posted on by

By Gidon Gautel

Print

Any exporting enterprise in China should be well versed in its tax rebate policy. The government began to implement the 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.

China underwent significant VAT reform in 2016 when it initiated the national changeover from Business Tax (BT) to VAT. The VAT tax reform mainly covered services; Intangible assets and immovable properties, meaning that VAT tax refunds for exports have not experienced significant upheaval. However, this is still an area exporters should familiarize themselves with.

Whilst a useful channel for recovering the costs of input taxes paid, not all goods are subject to tax refunds upon being exported. Additionally, businesses must register for, and keep tax authorities updated on their exports eligible for VAT tax refunds.

Continue reading…

Internal Control Review: Audit and Evaluation in China

Posted on by

By Dezan Shira & Associates
Editor: Zhou Qian

Whenever foreign investors want to figure out whether internal control exists and is sufficient in their Chinese subsidiaries, an internal control review (ICR) might be the best and very first step to achieve that. In contrast to an annual statutory audit, which mainly focuses on maintaining reliable financial reporting, the ICR cares more about the specific management process.

Continue reading…

New FASB Lease Accounting Standards Impact US Businesses in China

Posted on by

By Steve Austin, Firm Managing Partner of Swenson Advisors

US-based businesses with subsidiaries in China need to prepare financial statements that are consistent with US Generally Accepted Accounting Principles (GAAP) and the new Financial Accounting Standards Board (FASB) lease accounting standards.

While Chinese subsidiaries need to file financial statements consistent with China GAAP, often these financial statements need to be translated to US GAAP. Recent International Accounting Standards Board (IASB) standards have also changed the way leases are recorded in the financial statements in line with the new US GAAP standards.

Continue reading…

Internal Control in China – New Issue of China Briefing Magazine

Posted on by

IC magazine frontcover 250x350The latest issue of China Briefing Magazine, titled “Internal Control in China“, is out now and currently available to subscribers as a complimentary download in the Asia Briefing Publication Store.

In this Issue:

  • Internal Control for Business in China
  • Internal Control Review: Audit and Evaluation
  • Internal Control for Day-to-Day Operations
  • Using ERP Systems to Improve the Internal Control of Your Business

Continue reading…

New VAT Rates in China Simplify Tax Administration

Posted on by

By Jake Liddle

China has simplified its value-added tax (VAT) regime as part of its efforts to cut US$55.2 billion in taxes. As of July 1, 2017, China’s State Administration of Taxation (SAT) simplified its four tiered VAT system to three tiers. Previously, four brackets of 17 percent, 13 percent, 11 percent, and six percent existed. Under the new system, the 13 percent bracket has been removed. Continue reading…

Tax Considerations for Legal Representative Offices in China

Posted on by

By Dezan Shira & Associates
Editors: Lorena Miera and Thibaut Minot

Print

In Part 1, we explored establishment and operational issues of an LRO.

The legal representative office (LRO) is one of the handful of special representative offices with unique characteristics in China. These special ROs are usually established in China’s restricted industries, within which foreign investors are not allowed to set up a wholly foreign-owned enterprise (WFOE) and sometimes not even a Sino-foreign joint venture (JV), as is the case of the legal services industry.

Effectively, the LRO structure allows foreign law firms to perform their legal services in China while the parent company overseas assumes civil liabilities for the activities of its LRO in China. Key differences set the LRO structure apart from traditional ROs, differences that range from the traditional RO registration process to the entity’s business scope, and from the different accounting and tax practices they must follow to the funding mechanisms available to grow their operations.
Continue reading…

WeChat’s ‘Fapiao Helper’: A User’s Guide for this Helpful App

Posted on by

By Dezan Shira & Associates
Editor: Jake Liddle

Wechat Fapiao helper BANNER

From July 1, 2017, the State Administration of Taxation (SAT) has mandated that corporate tax identification numbers will be required in addition to company name in order to issue general fapiao or special VAT fapiao.

In reaction to the new requirements for fapiao issuance, WeChat has launched a new function that allows users to input relevant corporate tax information, and present it to service providers to issue fapiao.

Tammy Tian, Corporate Accounting Services Manager at Dezan Shira & Associate’s Beijing office says: “We advise all of our clients to familiarize themselves with this mini app, it’s a great way to save time when asking for a fapiao.”

Continue reading…

Pilot Tax Policies for Venture Capital Enterprises and Individual Investors in China

Posted on by

By Jake Liddle

Authorities recently announced tax incentives for venture capital enterprises (VCEs) and individual angel investors (AIs) making investments into tech startups. The incentives for VCEs and AIs are detailed in a joint circular detailing pilot tax policies produced by China’s Ministry of Finance (MOF) and the State Administration of Taxation (SAT).

Most notably, the circular provides similar tax incentives to both corporate and individual investors, irrespective of if individuals make investments as a partner of a limited partner VCE or as an AI. The preferential tax policies aim to promote and nurture venture capital investment.

While a part of China’s broader initiative to promote the development of small and medium sized enterprises (SMEs), the pilot program is a component of the US$55.2 billion in tax cuts approved by the government in April.

Continue reading…

Dezan Shira & Associates

Meet the firm behind our content. Dezan Shira & Associates have been servicing foreign investors in China, India and the ASEAN region since 1992. Click here to visit their professional services website and discover how they can help your business succeed in Asia.

News via PR Newswire

Never Miss an Update

Subscribe to gain even better insights into doing business throughout the China. Subscribing also lets you to take full advantage of all our website features including customizable searches, favorites, wish lists and gift functions and access to otherwise restricted content.

Scroll to top