October 2024 / China

On October 10th, 2024, the General Administration of Customs (GAC) has released the Announcement of the General Administration of Customs on Implementing the Write-off Management for Bonded Logistics Ledgers (Draft for Comment) (the "Draft") for public consultation until October 24, 2024.

The Draft focuses on three key areas:

1. Clarifying the scope of logistics ledgers subject to write-off management, including those for special customs supervision areas within the Golden Customs Project Phase II processing trade and bonded supervision subsystem, as well as those used in bounded supervision premises, inclusive of cross-border e-commerce ledgers.
2. Specifying detailed rules for write-off management of bonded logistics ledger, including provisions for the write-off cycle, time limit for declaration, required submission content, and the handling of the write-offs.
3. Outlining the transition requirements for switching between old and new bonded logistics ledgers: As the write-off management functionality for bonded logistics ledgers is rolled out, a six-month transition period will be provided to ensure seamless business operations, with clear guidelines for managing this transitional period.

Source: customs.gov.cn

On October 11th, 2024, three authorities including the Ministry of Finance (MOF) jointly released the Implementation Measures for the Pilot Reform of Water Resource Tax (the "Measures"), set to take effect on December 1, 2024.

The Measures outline regulations regarding elements of the tax system, such as taxpayers, tax base, tax rate standards, and tax incentives related to the water resource tax, stating that the water resource tax will be collected at differentiated rates based on the conditions of water resources, types of water usage, and economic development. The State will establish a minimum average tax rate standard for each province, autonomous region, and municipality directly under the Central Government, while local authorities will determine specific applicable rates. Additionally, the Measures mandate that higher tax rates be set for groundwater extraction and in regions facing significant water scarcity or over-extraction. They also clarify that, following the full implementation of the water resource fee-to-tax reform pilot program, all revenue from the water resource tax will be allocated to local governments.

Source: mof.gov.cn

Three departments, including the State Taxation Administration (STA), have jointly issued the Announcement on the Promotion and Use of Fully Digitalized Electronic Invoices for Railway Passenger Transport (the "Announcement") recently, effective from November 1, 2024. The Announcement specifies the basic content of electronic invoices (electronic railway passenger tickets), their numbering and coding rules, and the inquiry, verification, downloading, and usage by passengers and entities, among other matters. According to the Announcement, passengers may obtain, inquire about, download, and print the electronic invoices via the "Railway 12306" website or mobile app after completing their travel or paying the fees ticket refunds or rescheduling. Entities may both use their digital taxation accounts to inquire about, verify, download, print, and confirm the purpose of the electronic invoices, and verify the invoices through the National VAT Invoice Verification Platform. For entities that are general VAT taxpayers, electronic invoices may be used as VAT deduction certificates, and the input tax amount will be determined as per the existing regulations. A transition period for the full implementation of digitalized electronic invoices for railway passenger transport has been set, ending on September 30, 2025.   Source: chinatax.gov.cn