On 31 December 2021, the Ministry of Finance (“MOF”) and State Taxation Administration (“STA”) released two announcements (i.e.,
MOF STA Announcement [2021] No.42 and No.43) officially extending some preferential Individual Income Tax (“IIT”) policies
January 2022 - China extends transitional period for some preferential Individual Income Tax treatments
On 31 December 2021, the Ministry of Finance (“MOF”) and State Taxation Administration (“STA”) released two announcements (i.e.,
MOF STA Announcement [2021] No.42 and No.43) officially extending some preferential Individual Income Tax (“IIT”) policies
March 2021 - The OECD’s updated position on permanent establishment and residency due to COVID-19 pandemic
The COVID-19 pandemic has lasted for over one year now. The Organisation for Economic Co-operation and Development (“OECD”) has been following the pandemic closely, issuing guidance on the temporary change of work location because of travel restriction giving rise to the creation of permanent establishment (“PE”) or change in residence status of corporations, and guidance on transfer pricing.
September 2020 - China addresses permanent establishment and residency issues due to COVID-19
The COVID-19 pandemic has significantly impacted the normal operation of multinational enterprises to different extents. The OECD had issued an analysis called “OECD Secretariat Analysis of Tax Treaties and the Impact of the COVID-19 Crisis” on 3 April 2020. Mazars analyzed the OECD Analysis on its China Tax Newsletter in April 2020.
Chinese Human Resources and Social Security Regulations
Chinese government have issued various regulations in regard of Human resources(HR) and Social security(SC) to support enterprises in difficult period. We’d like to share with you the latest announcement which may benefit your company. Kindly note these are latest notices announced, it may be revised or cancelled by the government in such situation.
The State Administration of Taxation (the “SAT”) has loosened up its requirements for non- residents of China in claiming the applicable tax treaty benefits, effective 1 January, 2020. The new measures were issued under SAT Public Notice (2019) No. 35 (the” PN 35”) in October 2019. Previously, under the SAT Public Notice (2015) No. 60 (the “PN 60”), pre-approval by the China tax authority in claiming tax treaty benefits was not required, but taxpayers were still required to fulfil the record-filing procedure. The PN 35 goes even further by allowing non - resident taxpayers to determine whether it is eligible for the relevant tax treaty benefits, i.e., a self-assessment of eligibility, and claim such tax treaty benefit as long as the relevant supporting documents are retained for inspection by the tax authority.
This new measure is one of the measures to optimize the taxation business environment and to “streamline administration, delegate powers and improve regulation and services”.
CHINA’S NEW FOREIGN INVESTMENT LAW AND ITS IMPACT ON FOREIGN INVESTMENT ENTERPRISES
On 15 March, 2019, the National People’s Congress has passed the new Foreign Investment Law of PRC (the “Foreign Investment Law” or the “New Law”), which has come into force on 1 January, 2020. The new law marks the next level of Chinese government’s opening-up policy to enhance a more transparent business environment and to ensure that domestic and foreign enterprises compete on a level playing field, with equal treatment under the unified legislative rules and processes. It is also an attempt by the Chinese government to respond to international criticism from the US in light of the still on- going US-China Trade Negotiation. In particular, the Foreign Investment Law seeks to address common complaints from foreign businesses and governments, such as by explicitly banning forced technology transfers.
