Legal & Regulatory

Employee Allowances and Benefits Now Taxable


Sept. 17 – China’s State Administration of Taxation (SAT) has announced that it will begin taxing certain employee allowances like telecommunications and transportation as part of its general campaign to require more companies to report their tax activities in detail and tighten tax collection. According to the SAT, twenty percent of an employee’s telecommunications allowance […]

New Procedures Issued for Customs Declarations


Sept. 15 – China’s General Administration of Customs (GAC) has issued an announcement with a sample of the required additional documentation for assessing the value, classification and origin of goods effective October 1st. Following the GAC Announcement 49, “About Relevant Questions Concerning Additional Declaration of Imported and Exported Goods,” the additional forms will be used […]

Foreign Invested Partnership Rule Opens New Avenues for FDI


Sept. 11 – China’s Ministry of Commerce is finalizing the details of a draft regulation that is expected to be officially released by Beijing soon that allows foreign entities to apply for business licenses as a foreign invested partnership (FIP). The regulation is relevant for foreign fund managers because it provides the closest legal entity […]

Tax Clarification on Director’s Fees, 13 Month Salaries


Sept. 8 – The State Administration of Tax (SAT) issued Circular 121, clarifying four areas of individual income tax policy (IIT) namely director’s fees, 13 month salaries, criteria for recognition as a Chinese national residing overseas, and property splits associated with divorce. These are as follows: Director’s fees Director’s fees should be taxed under individual […]

Eurocham Paper Critical of China’s Protectionist Measures


Sept. 4 – The European Chamber of Commerce in China (EUCCC) has released their yearly position paper, this time taking a fairly critical stance on China’s progress on World Trade Organization reforms, citing the raising of trade barriers and the squeezing out foreign competitors from domestic markets. The paper detailed several areas of concern: Market […]

Customs Department Clarifies Outsourced Processing Trade Procedures


Sept. 1 – China’s General Administration of Customs has issued a circular clarifying the administration procedures for trade companies outsourcing their processing businesses and relevant H2000 administrative systems. Circular 51 confirms that processing trade companies with limited production capacity and technical capabilities can outsource their processing operations; pending approval of the local customs office. The […]

China Issues National Anti-Avoidance Audit Regulations


Aug. 31 – China’s State Administration of Taxation (SAT) has issued two new circulars to enforce tax collection and administration measures for  maintaining tax revenue growth and widening its domestic tax collection base. Circular No. 85 titled “Several Opinions on Improving Tax Collection and Closing Tax Loopholes, ” and Circular No. 114 called “Detailed Measures […]

SAFE Improves Foreign Exchange Administration, Nullifies Regulatory Documents


Aug. 27  – The State Administration of Foreign Exchange released a circular on Tuesday announcing that 25 regulatory documents have been repealed or nullified to improve the laws on foreign exchange administration. Of the 25 regulatory documents, 17 include the Circular on Adjusting the Examination and Approval Procedures for Financial Institutions Carrying Out Foreign Exchange […]

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