China Reforms Foreign Exchange Administration in Goods Trade

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Jul. 4 – The relevant Chinese governmental departments have issued an announcement to reform the system for administering foreign exchange with regards to trade in goods, as well as to adjust the relevant export declaration procedure. Along these lines, the information-sharing mechanism between export proceed collections and export tax refunds will also be improved.

The State Administration of Foreign Exchange (SAFE), General Administration of Customs (GAC) and State Administration of Taxation (SAT) jointly issued the “Announcement Regarding Reforming the Goods Trade Foreign Exchange Administration System (SAFE, GAC, SAT Announcement [2012] No. 1, hereinafter referred to as ‘Announcement No. 1’)” on June 27, 2012, which will come into effect on August 1, 2012.

According to Announcement No. 1, as of August 1, 2012, Export Foreign Exchange Proceed Collection Verification Forms (hereinafter referred to as “verification forms”) will be abolished, and enterprises will no longer undertake export earnings verification procedures. Accordingly, both export customs declarations and export tax refunds will be simplified after August 1, 2012. No verification forms will be required when enterprises conduct export customs declarations, nor are they required when enterprises apply for export tax refunds on goods declared for export after August 1, 2012. The tax bureaus will refer to information on the enterprises’ export proceed collection provided by SAFE and verify the enterprise’s export tax refund.

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