The State Taxation Administration ("STA"), the Ministry of Finance ("MOF") and the People's Bank of China ("PBC") recently released the Circular of the State Taxation Administration, the Ministry of Finance and the People's Bank of China on Further Strengthening the Management of Service Fees for Withholding, Collecting and Levying Tax on Behalf of Tax Authorities, which stipulates that, starting from October 1, 2023, the ratio of service fees paid for withholding and remitting tax on behalf of tax authorities in accordance with the rules was lowered to 0.5% at highest, or capped at 700,000 yuan. Where a law or administrative regulation provides for the ratio of service fees, the prescribed ratio shall prevail. The service fees refunded for withholding or collecting taxes were lowered to no more than 1% of the taxes withheld. The service fees refunded on vehicle and vessel tax as withheld by maritime management bodies under transport departments will not be higher than 5% of the tax withheld. In case of asking a withholding agent to collect vehicle purchase tax on behalf of tax authorities, the service fee would be 15 yuan per vehicle. In case of asking a withholding agent to collect tax on farmers market or professional market, the service fee should not be higher than 5% of the tax withheld.
November 2023 / China
The Ministry of Finance ("MOF") released on September 26, 2023 the Announcement on Extending the Favorable VAT Policies for the Development of Cultural Enterprises and the Announcement on Extending the Favorable VAT Policies for Publicity of Culture, clarifying that the relevant policies will be extended to December 31, 2023.
According to the documents, the country will continue to exempt the VAT on the incomes of those film group companies, film studios and other film enterprises that have been approved by the film authorities to engage in film production, distribution and projection as generated from sale of film copies, transfer of film copyrights, distribution of films and projection of films in rural areas.
For specific publications in the process of publishing, the policy of refunding 50 percent or 100 percent of the VAT after the tax collection would be continued; for specific printing or production business, the policy of refunding 100 percent of the VAT would be implemented; and the VAT would be exempted on wholesale and retail of books, as well as on ticketing incomes of science popularization units, said the documents.
Five Regions Including Beijing to be Included as Last Batch in Pilot Program for Electronic Invoicing Since November
Beijing and other remaining regions in China respectively released on October 27, 2023 the Announcement on Conducting the Pilot Program for Fully-digitalized Electronic Invoicing, making the decision to pilot e-invoices among some taxpayers in their respective regions starting from November 1, 2023.
According to the Announcement of the Beijing Municipal Tax Service, State Taxation Administration on Conducting the Pilot Program for Fully-digitalized Electronic Invoicing, starting from November 1, 2023, Beijing will pilot the program among certain taxpayers in the municipality that use the electronic invoice service platform, with the specific scope to be determined by the Beijing Municipal Tax Service. For this batch of pilot regions, there will still be four styles of digital e-invoices, i.e. digital e-invoices carrying the words of "Special VAT Invoices", the words of "General Invoices", the words of "Itinerary/Receipt of E-ticket for Air Transport", and the words of "E-ticket for Railway Transport".