June 2021 / China

30 Giugno 2021

Stamp Tax Law to Take Effect from July 2022

We would like to inform You of one recent piece of tax news that the Stamp Tax Law has been passed on June 10, 2021. The law will take effect from July 1, 2022, and the Interim Regulation on Stamp Duty will be abolished at the same time. The law generally maintains the current interim regulation, with appropriate simplification of tax items and rates to reduce the tax burden. We summarize main changes as below:

  1. Securities trading stamp tax will be imposed on sellers, and not on buyers, while the stamp tax rate will remain unchanged at 0.1% of the transaction value;
  2. The stamp tax rate of Processing contract, Construction engineering survey design contract and Goods transportation contract will be reduced from 0.05% to 0.03%;
  3. The stamp tax rate of Exclusive right To use trademark, Patent, Copyright and Letter of assignment of the right to use know-how will be reduced from 0.05% to 0.03%;
  4. In terms of business books, the stamp tax rate of 0.025% is only applicable to the aggregate amount of paid-in capital (share capital) and capital reserves, and stamp tax is no longer levied on licenses.

With the legislation of Stamp Tax Law, we suppose more strict supervision would be put on its compliance by tax authority. Please pay more attention.

30 Giugno 2021

STA Optimizes and Integrates Export Tax Rebate Information Systems

The State Taxation Administration released on June 16, 2021 the Announcement about Optimizing and Integrating Export Tax Rebate Information Systems and Providing Better Services to Taxpayers, with effect from June 3, 2021.

The STA has integrated export tax rebate systems, streamlined and optimized tax rebate application documents, tax settlement procedures and certificate issuance procedures. The announcement has listed nine circumstances where export tax rebate (exemption) documents can be streamlined; for instance, taxpayers will no longer have to provide Registration Form for Recordation of a Foreign Trade Business Operator, the Approval Certificate for a Foreign-Funded Enterprise in the People's Republic of China, and the Registration Certificate of Customs Declaration Entities in the People's Republic of China.

30 Giugno 2021

Land Appreciation Tax Policies for Enterprise Restructuring and Reorganization to Continue into the End of 2023

The Ministry of Finance and the State Taxation Administration released on June 16, 2021 the Announcement about Continuing the Implementation of Relevant Land Appreciation Tax Policies for Enterprise Restructuring and Reorganization, to be effective from January 1, 2021 until December 31, 2023.

The announcement has kept the preferential policies on land appreciation tax under four circumstances, that is, land appreciation tax will not be imposed on the transfer and change of property ownership (state-owned land use right, buildings and the attached installations thereon) when an enterprise is restructured, combined, split or reorganized and land resources were accounted as a means of investment. Besides, the announcement scrapped the expression that a company should provide relevant materials if it decides not to enjoy preferential policies, and instead stated that "relevant issues should be handled according to related tax regulations".

30 Giugno 2021

State Council Unveils Preferential Tax Policies to Expedite Construction of Affordable Rental Houses

Premier Li Keqiang chaired a State Council executive meeting on June 18, 2021, deciding to adopt favorable policies to expedite development of affordable rental housing across the country.

It was decided at the meeting that starting October 1, 2021 housing rental enterprises will be subject to a simple method of tax collection in private rentals, with the value-added tax rate reduced from 5 percent to 1.5 percent. Enterprises and public institutions will see the property tax cut to 4 percent in rentals to individuals and large-scale, professional rental enterprises. Cities with net population inflow could use collectively owned profit-oriented construction land and land owned by enterprises and public institutions to build affordable rental housing, with unused, inefficiently used business buildings and factories allowed to be transformed into rental houses.

30 Giugno 2021

China: FDI growth to remain robust, experts say

The growth of foreign direct investment in China will maintain its sound pace this year, thanks to the country's robust economic recovery and moves to upgrade its industries and further expand local demand, experts and business leaders said on Monday.

Despite the fact that many foreign economies fully resumed production later last year, the completeness of their industrial and supply chains cannot compete with China's, said Liu Xiangdong, a researcher at the China Center for International Economic Exchanges in Beijing.

Due to China's high vaccination rate and the swift recovery of its manufacturing sector, services sector and foreign trade, the nation has emerged as a safe and lucrative place for global capital, supported by the dual-circulation development paradigm-in which the domestic market is the mainstay and the domestic and foreign markets reinforce each other, Liu said.

After surpassing the United States as the world's biggest recipient of foreign investment last year, China's actual use of foreign capital soared 35.4 percent on a yearly basis to 481 billion yuan ($75.3 billion) in the first five months of this year. The volume surged 30.3 percent from the same period in 2019, data from the Ministry of Commerce showed.

Meanwhile, foreign investment in the service industry came in at 381.9 billion yuan between January and May, up 41.6 percent year-on-year.

Chen Bin, executive vice-president of the Beijing-based China Machinery Industry Federation, anticipated that China's attractiveness as a location for FDI will continue to grow in the second half of 2021, as the COVID-19 pandemic has seen a resurgence in export-oriented countries, including India, Vietnam, Malaysia and Thailand, in recent months. "If both domestic and global manufacturers in those countries are severely disrupted by the pandemic and stop working, it will have an impact on the global supply chain, and more FDI may keep flowing into China this year," said Ding Yifan, a senior research fellow at the Institute of World Development at the Development Research Center of the State Council.

Nearly 60 percent of European companies plan to expand their business in China this year, compared with 51 percent last year, according to a survey released last week by the European Union Chamber of Commerce in China.

About half of the surveyed companies said that their profit margins in China are higher than the global average. This proportion was 38 percent last year.

Toni Petersson, CEO of Oatly Group AB, a Swedish food and beverage company, said the company will bring its first plant in China in Ma'anshan, Anhui province, into operation later this year. Supported by a local innovation team, the company, apart from supplying plant-based milk, will tailor exclusive products such as ice cream for Chinese consumers to offer them more options, he said.

US multinational conglomerate Honeywell said it plans to invest in China's refinery sector over the next five years. "We see China's carbon-neutral commitment as an opportunity to join hands with Chinese partners to realize the refinery transformation by converting crude oil into more and more petrochemical products, or even completely into petrochemical products," said Henry Liu, vice-president and general manager of Honeywell Performance Materials and Technologies Asia-Pacific.

Vorwerk Group, a German industrial and technology company, will establish a digital solution center in Shanghai in the second half of this year to facilitate its transformation from a manufacturing company to a service-oriented manufacturer.

"This move will help many global companies better adapt to China's market," said Cha Sheng, general manager of Vorwerk China.

Source: China Daily

30 Giugno 2021

China: Hainan FTP to streamline approval process, widen market access

China's Hainan free trade port (FTP) will further simplify its approval procedures and broaden market access through a recently enacted law on the construction of the FTP, an official said Monday.

The FTP will streamline administrative processes, improve services and provide more institutional convenience for market entities, Feng Fei, governor of Hainan province, told a press conference.

On June 10, China passed a law, making institutional arrangements for the construction of the FTP at the national legislative level.

The law also enables market entities, especially foreign-invested companies, to enjoy more opportunities as it features a shortened negative list, which allows more sectors to be opened to foreign investors.

On pooling talent from around the world to Hainan, the law stipulates visa and work permit facilitation for international talent, Feng said.

Last June, China released a master plan to build the southernmost province into a globally influential and high-level free trade port by the middle of the century.

30 Giugno 2021

China increases penalties for workplace safety violations in new law amendment

China's top legislature on Thursday adopted an amendment to the Law on Workplace Safety. The amendment stipulates heavier penalties for workplace safety violations by production and business operation entities and their responsible persons. It also adds provisions concerning the new situation of workplace safety in emerging industries, including the platform economy, as well as other prominent problems affecting workplace safety efforts. Lawmakers approved the amendment at the closing meeting of a regular legislative session of the Standing Committee of the National People's Congress, which started in Beijing on Monday. The latest amendment will come into force on Sept 1, 2021.   Source: China Daily