March 2020 / China

March 31 2020

SAT Extends Deadline for Commissioned Withholding and Collection of Taxes to May 30

The State Administration of Taxation issued on March 17, 2020 the Circular about Extending the Deadline for Commissioned Withholding and Collection of Taxes. The deadline will be extended from March 30, 2020 to May 30, 2020.

The SAT requested tax agencies at all levels should comply with the Circular about Further Strengthening the Administration of Commissions on the Commissioned Withholding and Collection of Taxes, optimize procedures and reinforce examination, auditing and payment efforts.

March 31 2020

MOF and SAT Increase Export Tax Rebate Rates for Some Products

The Ministry of Finance and the State Taxation Administration released on March 17, 2020 the Announcement about Raising Export Tax Rebate Rates for Some Products. According to the announcement, the export tax rebate rate will be increased to 13% for 1,084 products, and to 9% for 380 products. The announcement will be implemented from March 20, 2020, and effective from the date of export indicated on the customs declaration forms.    
March 31 2020

SAT Releases Regulation for Refund of Value-added Tax on Made-in-China Equipment Purchased by R&D Institutions

The State Administration of Taxation recently released the Administrative Measures for the Refund of Value-added Tax on Made-in-China Equipment Purchased by Research & Development Institutions, effective from January 1, 2019 to December 31, 2020.

The regulation was drafted according to the Announcement on Continuing the Implementation of Value-added Tax Policies for the Purchase of Equipment by Research and Development Institutions (Issued in 2019 by the Ministry of Finance, the Ministry of Commerce and the State Administration of Taxation). When a R&D institution makes the first tax refund declaration, it shall present relevant documents to the local tax administration.

March 31 2020

MOF and STA Clarify VAT Policies for Individual Household Businesses

The Ministry of Finance and the State Taxation of Administration recently released the Announcement about Value-added Tax Policies to Support Resumption of Production and Operation of Individual Household Businesses.

According to the announcement, from March 1, 2020 to May 31, 2020, small taxpayers in Hubei will be exempted from value-added tax if their tax rate is set at 3%. Small taxpayers in non-Hubei regions will pay a lower tax rate of 1% on taxable sales revenue if their value-added tax rate is set at 3%.

March 20 2020

National Development and Reform Commission (NDRC) to Revise the Catalogue of Industries for Encouraging Foreign Investment

The National Development and Reform Commission issued on March 11, 2020 the Circular about Further Deepening Reform and Implementing Foreign-funded Projects to Tackle Epidemic. According to the circular, the NDRC and the Ministry of Commerce will revise the Catalogue of Industries for Encouraging Foreign Investment. The revisions will expand the scope of industries where foreign investment is encouraged, focus on high-quality manufacturing as well as industry transitions in central, western and northeast provinces.

The circular stated that tariff on self-use equipment imported for foreign investment projects will continue to be waived within the investment quota. For projects beyond the investment quota, project companies can make applications with the provincial development and reform commission to enjoy tariff exemptions, and the provincial commission will conduct preliminary examinations and report to the NDRC.

March 31 2020

Nearly 90% of SMEs resume operations in Shanghai

SHANGHAI — A total of 89 percent of small and medium-sized enterprises (SMEs) in Shanghai had resumed operations as of March 23, with 79 percent of their employees back to work, local authorities said on March 24.

Local authorities distribute more than 1 million masks daily to these SMEs and have facilitated over 20,000 SMEs to purchase masks. Epidemic prevention and control materials, including disinfection products and goggles, have been provided to more than 100 SMEs in the metropolitan, Zhang Jianming, deputy director of Shanghai Municipal Commission of Economy and Information, told a press conference on March 24.

"SMEs have been greatly affected by the pandemic. Through the research of SMEs and a survey on 2,622 small and micro enterprises in Shanghai, we found the difficulties of SMEs in resuming work and production mainly include the increase of operating costs and the lack of confidence in development," Zhang said.

Shanghai has introduced a raft of measures to beef up the steady and healthy development of SMEs, including a 2 billion yuan (about $283 million) financing service for small and micro enterprises and a 500,000 yuan award to SMEs related to epidemic prevention and control that plan to get listed, Zhang added.

According to the official, commercial banks, including the SPD Bank and the Shanghai branch of Bank of China, plan to allocate a special loan totaling 30 billion yuan to help SMEs cope with the impact of the pandemic.

March 31 2020

Two Authorities Move to Facilitate Cross-border Financing by Chinese Institutions

The People's Bank of China and the State Administration of Foreign Exchange issued on March 12, 2020 the Circular about Adjusting Macro-Prudential Management Parameter of Full-Covered Cross-Border Financing.

The circular said that the macro-prudential management parameter of full-covered cross-border financing will be lifted to 1.25 from 1. The adjustment will be helpful for domestic companies, especially small and medium-sized firms and private companies, to tap into the domestic and foreign markets to raise funds at affordable cost. The circular is immediately effective.