February 2020 / China

The State Taxation Administration recently released the Circular about Export Tax Refund (Exemption) During the Prevention and Control of Coronavirus. During the epidemic period, taxpayers can handle tax affairs like making registrations for tax refund & exemption, issuing tax certificates and making tax refund (exemption) declarations through "non-contact" means. After receiving applications, tax agencies will only examine electronic documents and grant tax refund (exemption) status if there is no suspicion of tax fraud. From February 3, 2020 until the end of the epidemic period, local tax agencies shall not be considered overdue if it postpones tax refund or sends a reply later than expected due to the epidemic; tax agencies can send online notices to taxpayers about whether their tax refund (exemption) applications have been approved.

The Ministry of Human Resources and Social Security, the Ministry of Finance and the State Taxation Administration recently issued the Circular about Provisional Reduction and Exemption of Corporate Contributions in Social Security. According to the circular, in provinces other than Hubei, micro, small and medium-sized enterprises will be eligible for a waiver of pension fund, unemployment and workplace safety insurance contributions from February to June 2020. Large companies will see their contributions halved for three months. Companies of all types in Hubei who have participated in these insurance schemes will be exempted from the above contributions from February to June. These policies are estimated to reduce enterprises' cost by about 500 billion yuan. The circular also said that the central government's reallocation ratio of basic endowment insurance funds will increase to 4% in 2020 to offer stronger support to hard-hit regions.  

In order to support companies to resume production and operation and facilitate tax declarations by corporate taxpayers, the State Taxation Administration recently issued a circular to extend the deadline for tax declaration in February 2020 to the end of the month. According to the circular, for taxpayers that make tax declarations on a monthly basis, except those based in Hubei province, the deadline for tax declaration will be further extended to February 28, 2020 (Friday). If taxpayers are still unable to declare tax before that date, they can give legitimate reasons to the tax bureau and make an application to defer tax declarations. The tax bureau will not impose surcharges for overdue tax payment, not impose administrative penalties and not adjust its tax credit rating.

The State Taxation Administration recently issued the Announcement about Tax Collections during the Coronavirus Epidemic. According to the announcement, if an enterprise hit-hard by the epidemic wants to extend the period for loss carryover, it should submit an electronic version of the Statement of Eligibility for Extending the Period of Losses Carryover when it pays corporate income tax for 2020; if a taxpayer is eligible for privileges on value-added tax and consumption tax, it can make tax-free declarations and keep relevant tax documents for future examinations.

The Ministry of Commerce issued on February 10, 2020 the Circular about Strengthening Services to Foreign Enterprises and Attracting Investments During the Coronavirus Epidemic. The circular pointed out that local commerce departments should take swift actions to help foreign companies resume normal production and business operations, use Internet platforms for staff recruitment and meet their labor needs. Officials should closely monitor the progress of large foreign investment projects, increase communications with foreign investors and strive to sign project contracts as early as possible.

The eight areas refer to the Beijing-Tianjin-Hebei region, Shanghai municipality, Guangdong province (Pearl River Delta), Anhui province (Hefei, Wuhu and Bengbu cities), Sichuan province (Chengdu, Deyang and Mianyang cities), Wuhan of Hubei province, Xi’an of Shaanxi province, and Shenyang of Liaoning province, where 36 reform measures were carried out in 2017 and 2018. Seven reforms will help further innovation of technological finance. For example, banks and investment institutions will be encouraged to support innovation-driven technology companies by establishing a long-term market-based cooperation mechanism, and a financing evaluation system will be built for small and medium-sized technology companies. And to promote innovation of technology management, six measures will be adopted, including one to pool strengths to create a shareholding alliance among cutting-edge technology industrial chains, and another to promote the mixed-ownership reform in related State-owned enterprises in old industrial bases. In addition, to protect intellectual property rights, two measures will be implemented to establish platforms providing inter-regional lawsuits and notary services. And finally, one measure will be applied to forge a new vocational education development mechanism and four to further civil-military integration. The circular also required efforts to promote the newly issued 20 reform measures while consolidating those released in 2017 and 2018. The systematic integration of the measures in the same areas and the collaboration among the measures in different areas will both be strengthened. Local authorities should be clear about their responsibilities and take actions in line with specific conditions, and related departments of the State Council should strengthen support and guidance. The National Development and Reform Commission and the Ministry of Science and Technology should take the lead in the reforms, especially in overall planning and coordination, strengthening policy interpretation, summarizing and publicizing typical experiences, it said.

The State Council recently issued the Circular of Temporarily Adjusting Some Administrative Regulations in Pilot Free Trade Zones, in order to ensure measures of reform and opening-up are implemented well in accordance with the law. According to the announcement, three administrative rules will be adjusted in the pilot free trade zones. Under the Regulation on the Administration of Commercial Performances, foreign investors and Taiwan investors can establish wholly-owned performance brokerage agencies, joint ventures in art performing business can be established as long as the Chinese partners have controlling stakes. The Provisions on the Administration of Foreign-funded Telecommunications Enterprises have expanded coverage from Shanghai free trade zone (28.8 square kilometers) to all free trade zones in China. Under the Regulations on the Administration of Printing Industry, wholly foreign-owned printing companies can be established in China.