August 2019 / China

The State Administration of Taxation, the Ministry of Finance and the General Administration of Customs recently issued the Announcement of Promoting General Value-added Taxpayer Qualification at Comprehensive Bonded Zones. According to the announcement, customs agencies can grant general value-added taxpayer qualification to enterprises in the special customs regulatory zones. Pilot enterprises can issue special value-added tax invoices when they sell products to domestic customers (Including other pilot firms in the zones), and declare value-added tax and consumption tax. If pilot enterprises import self-use equipment (Including machinery, infrastructure resources and office supplies), they would be exempted from import tariff, import value-added tax and consumption tax.

Shanghai municipal government published on August 20, 2019 the Measures for the Administration of New Lingang Area of China (Shanghai) Pilot Free Trade Zone. The regulation said the new area will build open-minded regulatory systems and expand openness to foreign investors in such key sectors like telecommunication, insurance, securities brokerage, research and technology services, education and healthcare. The area will strive to build a business cluster for high-end sectors like integrated circuits, artificial intelligence, biomedicine, civil aviation, new energy vehicle and intelligent equipment. The new area will continue to expand opening-up and introduce innovative institutional reforms.

The State Council released two documents on August 26, 2019 - the Approval of Six New Pilot Free Trade Zones, and the Overall Development Plans for Six New Pilot Free Trade Zones. The six new pilot free trade zones are located in Shandong, Jiangsu, Guangxi, Hebei, Yunnan, and Heilongjiang. According to the plans, these pilot free trade zones are mandated to fulfill different reform tasks. For instance, China (Shandong) Pilot Free Trade Zone will develop high-quality marine economy, and enhance shipping service capacity. The zone will also explore ways to deepen economic cooperation with Japan and the Republic of Korea. China (Jiangsu) Pilot Free Trade Zone is tasked to enhance investment cooperation with foreign countries, strengthen the financial industry's service and support to the real economy, and work out effective policies to promote innovative development of the manufacturing sector.

The National Development and Reform Commission and the State Administration of Taxation recently issued the Circular about Strengthening Construction of Tax Credit System for Individual Income Taxpayers. The circular said individual income taxpayers with serious dishonest behaviors would be subject to joint punishment. Tax agency and relevant departments will work together to roll out joint punishment measures against taxpayers who make dishonest or false tax declarations, special additional tax deductions and tax privileges. Their information will be transferred to the national credit information sharing platform, and their credit data will be updated from time to time.