February 2024 / China

February 29 2024

GAC Issues Measures for Customs’ Levying of Taxes on Domestic Sale of Value Added Goods Being Processed in the Hengqin Cooperation Zone

The General Administration of Customs (GAC) released on January 24, 2024 the Measures for the Customs of the People's Republic of China to Levy Taxes on Domestic Sale of Value Added Goods Being Processed in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin (Hengqin Cooperation Zone), to be effective on the date when the Zone completes inspection and acceptance of regulatory facilities and starts to implement the tax policies.

Under the MOF, GAC and STA No.1 (2024) Document, for the goods produced by an enterprise in the Hengqin Cooperation Zone that contain imported materials or parts and create added value of 30 percent or above after being processed in the Zone, their entry into the mainland from the Zone would be waived from the import duties, but the import value added tax and consumption tax would be levied as required. The Measures refine the criteria for the implementation of the VAT exemption policy, clarifying that the policy applies to those enterprises that have registered at the Zone with independent legal entity. The Measures also make clarifications on the "creation of added value of 30 percent or above after being processed in the Zone" and the scope of "imported materials or parts".

February 4 2024

STA Issues Arrangements for Consolidated Settlement and Payment of IIT on Comprehensive Incomes for 2023

The State Taxation Administration (STA) issued on February 1, 2024, the Announcement on Matters concerning the Settlement and Payment of Individual Income Tax ("IIT") on Comprehensive Incomes on a Consolidated Basis in 2023, which consists of a total of 12 articles.

Compared with the documents of previous years, the Announcement for 2023 has made four changes:

  1. extending the confirmation time for settlement agents and no longer requiring them to confirm their entrustment relationship with entrusting entities before April 30;
  2. specifying the method, venue and time of the consolidated declaration of multiple equity incentives;
  3. clarifying the provisions on the service of relevant documents for settlement regarding taxpayers who have not fully declared and paid taxes; and
  4. adjusting the starting time of making appointment for tax handling and settlement to February 21.
Tax authorities will also strengthen regulatory reminder issuance this year, focusing on taxpayers who wrongly declare special additional deductions, as well as taxpayers who have not declared or fully paid taxes.   Source: Announcement of the State Taxation Administration
February 19 2024

China exempts stamp tax on offshore trade in Shanghai free trade zone

The Ministry of Finance (MOF) released on February 18, 2024 the Circular on the Pilot Implementation of Preferential Stamp Tax Policy on Offshore Trade in China (Shanghai) Pilot Free Trade Zone and Lin-gang Special Area (MOF and STA No.8 (2024) Document).

According to the Circular, during the period from April 1, 2024 to March 31, 2025, the contract note of offshore resale business carried out by the enterprises registered in China (Shanghai) Pilot Free Trade Zone and Lin-gang Special Area will be exempted from stamp duties, and the offshore resale business refers to the transaction in which a resident enterprise purchases goods from a nonresident enterprise and then resells them to another nonresident enterprise without making the goods enter or exit China's customs territory.

February 9 2024

GAC Clarifies Duty Exemption Policy for Import of Goods in the Hengqin Cooperation Zone

The General Administration of Customs (GAC) issued on February 6, 2024 the Measures of Customs of the People's Republic of China for the Administration of Duty Exemption on Import of Goods in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin (Hengqin Cooperation Zone) (GAC No.18 (2024) Announcement), which will take effect from the date when the Zone completes inspection and acceptance of regulatory facilities and starts to implement the tax policies.

The Circular on the Tax Policies for Entry and Exit of Goods in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin issued in January 2024 stipulates that importers of duty-free products in the Hengqin Cooperation Zone are exempt from import tariffs, import value-added tax, and consumption tax on the machines, equipment, molds, as well as spare parts and infrastructure materials used for repairing the abovementioned goods which they import for self-use.

The Measures further clarify the declaration and subsequent management details of the above duty exemption policy.