July 2021 / China

30 Luglio 2021

Changes on Expats’ Social Insurance in Shanghai

We would like to inform you that the 2009 Shanghai Notice, which allows foreign employees to choose whether to contribute or not to the Social Insurance dues, will expire soon, on 15 August 2021.

According to the PRC Social Insurance Law announced in 2010, all employers and employees in China, including foreigners, are subject to Social Insurance dues. In particular, the rates for company and individual in Shanghai are as below:

  Company Individual
Endowment 16% 8%
Medical (including Maternity) 10.5% 2%
Unemployment 0.5% 0.5%
Injury 0.16% - 1.52% -

*The calculation base for the social insurance in Shanghai is announced on July 9th, 2021. The application of this new standard will start in July 2021.

  • The minimum calculation base is CNY 5,975/month and,
  • The maximum calculation base is CNY 31,014/month.

In Shanghai, this law is exempted by the 2009 Shanghai Notice, issued by the Municipal Human Resource and Social Security Bureau, saying that foreign employees may contribute to the Social Insurance. In practice, foreigners working in Shanghai are able to choose whether to contribute or not, reaching an agreement with the employer.

As mentioned, the expiration date of the notice is 15 August 2021, so far there is still not any new policy or other extension notice. This means that, after 15 August, unless further extended, the 2009 Shanghai Notice will not be applicable anymore and all employers and foreign employees in Shanghai will be obligated to the Social Insurance dues following the national PRC Social Insurance Law.

30 Luglio 2021

The Change on Record Filing for External Payments of Trade in Services at Tax Authority

State Taxation Administration announced on 2nd July about the change on record filing for external payments of trade in services at tax authority. The main contents are:

1.If a domestic entity or individual needs to make multiple payments for the same contract, it only needs to apply for tax filing when making the first payment.

2.It does not need to apply for tax filing if foreign investors reinvest in China using lawful income from domestic direct investment.

3.The tax filing could be done either through E-tax hall or at tax hall on-site.

In view of this change, we kindly remind that:

1.If you have completed the tax filing for payment of certain contract before the announcement, and need to make payment for same contract now, there is no need to do tax filing of payment again.

2.A single external payment not exceeding the equivalent US $50,000 is not required to do tax filing. If multiple external payments are required based on the same contract, tax filing is only required when a single payment exceeds the equivalent amount of US $50,000 for the first time.

3.If the external payment has not been made, the tax filing form can be canceled or amended. If the external payment has already been made, the tax filing form can only be amended.

30 Luglio 2021

Shanghai Pudong Plans to Cut Corporate Income Tax Rate to 15% for Key Tech Companies

The Communist Party of China Central Committee and the State Council released on July 15, 2021 the Opinions about Supporting High-level Reform and Opening-up of the Pudong New Area and Building a Pioneer Area for Socialist Modernization.   The document proposed to cut enterprise income tax rate to 15% in the first five years for companies in key sectors like integrated circuit, artificial intelligence, biomedicine and civil aviation at designated areas in Pudong.   A core area in Pudong will be zoned to launch preferential corporate income tax policies for venture investment companies. During the pilot period, eligible venture investment companies can be treated as individual investors and exempted from corporate income tax.
30 Luglio 2021

STA Revises Regulation on the Procedures for Handling Tax Audit Cases

The State Taxation Administration has revised the Work Rules for Tax Audit, and renamed the work rules into the Regulation on the Procedures for Handling Tax Audit Cases, to be implemented from August 11, 2021.

In the ninth article, the regulation stresses protection of administrative counterparty's personal information; the 11th article is added to "keep language, audio or video record" of the entire process of law enforcement actions; the 44th article stipulates that the letter of tax administrative penalty should explain the "evidence of unlawful tax activities"; the 51st article is added to stipulate that "an applicant can apply to defer payment of administrative penalty or make installment payment in case of economic hardship. With the approval of the commissioner of the tax bureau, the payment may be deferred or paid in installments ".

30 Luglio 2021

State Council Proposes to Give IIT Special Additional Deduction to Parents for Their Expenditure for Taking Care of Children Below Three

The Communist Party of China Central Committee and the State Council released on July 20, 2021 the Decision about Optimizing Birth Policies and Promoting Long-term and Balanced Population Development, introducing three-child policy and supporting measures.

The decision proposed to offer IIT special additional deduction to parents for their nursing expenses for children below three years old.

We suppose in near future official announcement and detailed implementation will be given by the State Taxation Administration.

30 Luglio 2021

China to Actively Expand Cross-border E-commerce Pilot Zones: MOC

China's Ministry of Commerce (MOC) on Monday pledged to actively expand the integrated pilot zones for cross-border e-commerce to cultivate new competitive edges in foreign trade.

Some cities have submitted applications to the State Council for the establishment of new pilot zones and the MOC will join relevant departments in carrying out related work, Ren Hongbin, assistant minister of commerce, told a press conference.

The MOC also promised to formulate guidelines for the protection of cross-border e-commerce intellectual property rights, optimize the list of cross-border e-commerce retail imports, and facilitate the return and exchange management of cross-border e-commerce import and export.

China's cross-border e-commerce has been expanding much faster than overall foreign trade, and its share in overall foreign trade has gone up significantly.

Since 2015, China's State Council has established 105 cross-border e-commerce pilot zones in five batches. The new business model has become a vibrant force driving China's foreign trade growth.

China's cross-border e-commerce imports and exports reached 1.69 trillion yuan (about 260.9 billion U.S. dollars) in 2020, up 31.1 percent year on year. Over the past five years, China's cross-border e-commerce has grown by nearly 10 times, according to Ren.

To further spur the growth of foreign trade, China's State Council released guidelines earlier this month on accelerating the development of new forms and models of foreign trade to push forward its upgrading and foster new competitive strengths.

Source: Xinhuanet

30 Luglio 2021

Shanghai’s Pudong to Take Lead in China’s Socialist Modernization: Officials

The Pudong New Area in Shanghai will play a leading role in China's new journey to fully build a modern socialist country in a number of areas, central and local officials said Tuesday.

Cong Liang, deputy head of the National Development and Reform Commission, said Pudong will lead in fostering the impetus for high-quality development, high-level self-reliance and smooth economic circulation in the country.

Last week, China issued a guideline to support high-level reform and opening-up of Pudong and build the area into a pioneer of socialist modernization.

By 2050, Pudong is expected to become an important urban area that is highly attractive, creative, competitive and influential globally, a global model of urban governance and a "shining pearl" of a great modern socialist country, the guideline said.

To lead China's socialist modernization, Pudong will also promote the implementation of the people-centered development concept and seek high-level institutional supply, Cong told a press conference.

Pudong shall push forward reform with a focus on key sectors and links, and turn the valuable experiences and good practices into laws and regulations in time, he said.

Instead of making Pudong a land of preferential policies, the government's supportive measures will give Pudong greater say in reform and development and help build it into a powerful "propeller" for high-level reform and development, Cong added.

To this end, measures will be rolled out in areas such as financial opening up, technological innovation and customs control, according to the officials present at the press conference.

Wang Xin, head of the research bureau at the People's Bank of China, said the central bank will support the building of an international financial center in Shanghai, back the municipality in piloting the free use of Chinese currency renminbi (RMB) and facilitate the capital inflow and outflow for corporate trade and investment.

To attract top global talents, the Pudong New Area will also help overseas workers obtain Chinese permanent residence permits, ease certain employment restrictions and improve certification for international professional qualification, according to Weng Zuliang, secretary of the Pudong New Area Committee of the Communist Party of China.

Since being designated a new area in 1990, Pudong has undergone a remarkable transformation, becoming a popular destination for investors, innovators, and policy pilots. Its regional GDP surged more than 210 times from 1990 to 2019.

Source: Xinhuanet

30 Luglio 2021

China’s H1 Foreign Trade Hits Record High

China's foreign trade rose 27.1 percent year on year to 18.07 trillion yuan (about 2.79 trillion U.S. dollars) in the first half of the year, the best performance in history, official data showed Tuesday.

The growth marks an increase of 22.8 percent from the pre-epidemic level in 2019, the General Administration of Customs (GAC) said. Exports jumped 28.1 percent from a year earlier, while imports climbed 25.9 percent in yuan terms. In June alone, the country's imports and exports went up 22 percent year on year to 3.29 trillion yuan, marking an increase for the 13th month in a row.

China's trade with its top three trading partners - the Association of Southeast Asian Nations, the European Union, and the United States - maintained sound growth in the first half of the year, said GAC spokesperson Li Kuiwen.

During the period, the growth rates of China's trade value with the three trading partners stood at 27.8 percent, 26.7 percent and 34.6 percent, respectively. China's trade with countries along the Belt and Road rose 27.5 percent year on year to stand at 5.35 trillion yuan, while trade with countries of the Regional Comprehensive Economic Partnership grew 22.7 percent year on year, GAC data showed.

China's cross-border e-commerce also maintained steady expansion in the first six months, with the total trade value growing 28.6 percent year on year to reach 886.7 billion yuan, the data showed.

For the second half of the year, China's foreign trade growth may slow down due to a high base last year, said Li, adding that the foreign trade for the whole year is still expected to maintain rapid growth.

  Source: Xinhuanet