March 2021

  • Hong Kong
    • Hong Kong to Raise Stamp Duty on Stock Transfers

      On 5 March 2021, the Hong Kong government published the Revenue (Stamp Duty) Bill 2021 (the Bill) in the Gazette to give effect to the proposal to increase the rate of stamp duty on stock transfers to 0.13% (from 0.1%) as announced by the Financial Secretary in the 2021-22 Budget.

      The Bill seeks to amend the Stamp Duty Ordinance to increase the rate of stamp duty payable on contract notes for the sale or purchase of Hong Kong stock and correspondingly on certain transfers of such stock with effect from 1 August 2021.

      The Bill will be introduced into the Legislative Council for first reading on 17 March 2021.

      The full details of the Bill are available here.

  • Bulgaria
    • FDI in Bulgaria in January 2021 was 32.7M euro

      Foreign direct investment in Bulgaria in the first month of the year stood at 32.7 million euro, the equivalent of 0.1 per cent of the gross domestic product (GDP), statistics from the Bulgarian National Bank (BNB) showed on March 19.

      In January 2020, FDI was 108.4 million euro, but the BNB originally reported 15 million euro, which was revised upward later.

      Investment in equity, including in the real estate sector, was 4.5 million euro (compared to an outflow of 52.7 million euro in January 2020) and the BNB figures showed 29.8 million euro in re-invested earnings (compared to 120.7 million euro for January 2020.)

      Net receipts from real estate investments by foreign companies totalled 0.1 million euro, the same amount recorded in January 2020.

      The central bank data showed 1.6 million euro in investment outflows as debt instruments, recorded as the change in the net liabilities of Bulgarian companies towards their foreign investor owners, compared to an inflow of 40.4 million euro in the first month of 2020. Such financial flows include financial loans, suppliers’ credits and debt securities, BNB said.

      By country, the largest direct investment in Bulgaria in January 2021 came from the Netherlands (23.9 million euro) and Germany (6.8 million euro). Notable net outflows were recorded towards Cyprus (-18.1 million euro), Italy (-11.1 million euro) and Austria (-7.4 million euro).

      According to preliminary figures, Bulgarian investment abroad increased by 1.8 million euro in January, compared to 11.6 million euro in the same month of last year, BNB said.

    • Bulgaria Clarifies Taxation of E-Commerce

      On 9 March 2021, the National Revenue Agency (NRA) published its position on the application of e-commerce taxation for personal income tax purposes. The NRA stated that no personal income tax is due when an individual sells personal items and items that are not bought for the purpose of being resold immediately afterwards.

      When an individual is regularly selling goods, which are clearly not acquired for private use but for trading and profit purpose, then they must declare the amounts in their tax return and pay the tax due.

      The full text of the clarification, issued on 9 March 2021, is available here (in Bulgarian only).

    • Bulgaria: Unemployment Kept in Check, Support Measures Yield Results

      On average, six unemployed people are competing for one vacancy - according to the latest Employment Agency figures as of the end of February 2021.

      In 17 regions the unemployment rate is above the national average, with the highest values recorded in northwestern Bulgaria - Vidin, Montana and Vratsa.

      The strongest competition is in the districts of Razgrad and Vidin, where 15 and 12 unemployed people compete for one vacancy position, respectively.

      At the other pole are Sofia-city and Ruse - with 4 aspirants per vacancy.

      The data show that by end of January, eight people competed for a vacancy across the country, and as of the end of December last year they were nine.

      According to social analysts, the reason for the improvement of the labour market picture is mainly the anti-crisis measures taken to preserve employment.

      According to the latest data, the unemployment rate in the country is 6.9%.

      Traditionally the lowest level is its level in Sofia-capital – a tad under 3%, and the highest - in Vidin region - 14%.

      Source: Novinite

    • Bulgaria Announces New Reporting Form for Advance CIT Instalments

      The Ministry of Finance has approved a new template form for the reporting of advance instalments of corporate income tax (CIT).

      From 1 January 2021, CIT taxpayers should determine the advance CIT instalments and report them by filing the new form. Submissions should be done electronically between 1 March and 15 April 2021.

      Once the advance CIT instalments are filed, changes to the assessment can be made. The changes must be filed before 15 November of the relevant fiscal year.

      The new form is available on the website of the National Revenue Agency.

  • United States
    • White House Unveils President Biden’s Corporate Tax Reform Plan

      The White House has released a Fact Sheet, dated 31 March 2021, which outlines President Biden's plan for US corporate tax reform. President Biden intends his corporate tax reform to incentivize job creation and investment within the United States, stop unfair and wasteful profit shifting to tax havens, and ensure that large corporations pay their fair share of tax.

      Specifically, President Biden proposes the following corporate tax changes:

      • increasing the corporate tax rate from 21% to 28%;
      • reinforcing the global minimum tax for US multinational corporations (i.e. the global intangible low-taxed income, or GILTI) by:
        • setting the tax rate at 21%;
        • calculating the tax on a country-by-country basis; and
        • eliminating the exemption for the first 10% of return on investments in foreign countries (i.e. the qualified business asset investment, or QBAI);
      • encouraging other countries to adopt strong minimum taxes on corporations and seeking a global agreement on it through multilateral negotiations;
      • replacing the base erosion and anti-abuse tax (BEAT) with a new regime that denies deductions to foreign corporations on payments that could permit them to strip profits out of the United States if they are based in a country that does not adopt a strong minimum tax;
      • making it more difficult for US corporations to invert (i.e. acquire or merge with a foreign company to avoid US taxes by claiming to be a foreign company although their place of management and operations remains in the United States);
      • denying deductions for expenses incurred in offshoring jobs and providing tax credits for expenses incurred in onshoring jobs;
      • repealing the foreign-derived intangible income (FDII) rules, which may give corporations a tax break for shifting assets abroad and be ineffective at encouraging corporations to invest in research and development (R&D) in the United States;
      • enacting a 15% minimum tax on large corporations' book income (i.e. the type of income that corporations use in reporting their profits to investors);
      • eliminating special tax preferences for the fossil fuel industry to put the country on a path to net-zero greenhouse gas emissions by 2050; and
      • providing the US Internal Revenue Service (IRS) with the resources it needs to effectively audit, and enforce the tax laws against, corporations.
        Diacron US
    • United States Announces Next Steps of Digital Services Taxes Investigations into 10 Jurisdictions

      The Office of the US Trade Representative (USTR) has announced the next steps in its investigations of the Digital Services Taxes (DSTs) adopted or under consideration by 10 jurisdictions. Specifically, the USTR proposed to impose additional tariffs against Austria, India, Italy, Spain, Turkey and the United Kingdom (UK). The USTR also terminated its DST investigations into Brazil, the Czech Republic, the European Union (EU) and Indonesia.

      The USTR issued a Press Release of 26 March 2021 to make the announcement.

      According to the Press Release, the USTR proposed the imposition of, and requested public comments on, additional tariffs of up to 25% ad valorem (i.e. according to the value) that would collect duties on goods of the following six jurisdictions approximately in the amount of the DST that the jurisdiction is expected to collect from US companies:

      • Austria (up to approximately USD 45 million per year);
      • India (up to approximately USD 55 million per year);
      • Italy (up to approximately USD 140 million per year);
      • Spain (up to approximately USD 155 million per year);
      • Turkey (up to approximately USD 160 million per year); and
      • the UK (up to approximately USD 325 million per year).

      In addition, the USTR terminated its investigations into the four jurisdictions (Brazil, the Czech Republic, the EU and Indonesia) based on its finding that the four jurisdictions have not adopted or implemented the DSTs that were under consideration when the USTR initiated the investigations. The Press Release notes, however, that the USTR may initiate new investigations if any of those jurisdictions proceeds to adopt or implement a DST.

      The USTR previously issued a Status Update, dated 13 January 2021, discussing the status of those four jurisdictions' consideration of a possible DST and expressing US concerns that DSTs may be adopted in the future.

    • American Petroleum Institute Endorses Carbon Tax to Fight Climate Change

      The American Petroleum Institute (API) has announced that it endorses a carbon tax or other types of a carbon pricing policy (such as a cap-and-trade system) that the Biden administration is expected to unveil shortly.

      The API made that announcement in its Climate Action Framework and Executive Summary, as well as API Policy Principles on Carbon Pricing to Evaluate Government Policy Proposals.

      The API urges the carbon pricing policy to be:

      • intended to achieve greenhouse gas (GHG) emissions reductions at the least cost to society;
      • applied US economy-wide;
      • designed to provide transparent invectives based on actual GHG emissions to reduce GHG emissions efficiently;
      • non-duplicative to minimize the burden of duplicative regulations;
      • aimed to meet the dual challenges of continued US economic growth and global competitiveness, while addressing the risks of climate change;
      • globally integrated so that US entities have the incentive to reduce their carbon footprint on a worldwide basis without being competitively disadvantaged and to avoid carbon leakage (i.e. the movement of industry or trade, or offshoring or outsourcing of GHG emissions, from the United States to countries with less strict climate policies); and
      • focused on GHG emissions such that the trading and use of applicable credits and offsets are allowed.

      Note 1: The API is a US national trade association that represents all segments of the US oil and natural gas industry. The API's mission is to promote safety across the industry globally and to influence public policy related to the industry.

      Note 2: A carbon tax is imposed on carbon or other types of GHG emissions (such as methane) and thus increases the price of goods created through a GHG-intensive production process. Revenue raised by a carbon tax could be spent on GHG mitigation efforts, but merely "pricing" carbon emissions establishes a market mechanism that incentivizes manufacturers to reduce GHG emissions.

      Note 3: In a cap-and-trade system, the government sets a cap on GHG emissions that drive global warming, and issues emission allowances consistent with that cap to companies. Companies may buy and sell emission allowances that let them emit only a certain amount. Such trade establishes an emissions price, which generates a strong incentive to reduce GHG emissions in the most cost-effective ways.

    • IRS Updates FAQs on Virtual Currency Transactions

      The US Internal Revenue Service (IRS) has released the updated Frequently Asked Questions on Virtual Currency Transactions (FAQs). The FAQs provide guidance for taxpayers who hold virtual currency as a capital asset.

      The IRS updated the FAQs by adding Q5 to explain the question on virtual currency on page 1 of IRS Form 1040 (US Individual Income Tax Return) for 2020, which asks: "At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?"

      The FAQs clarify that a taxpayer is not required to answer yes to the question if the taxpayer's only transactions involving virtual currency during 2020 were purchases of virtual currency with real currency.

    • Joint Committee on Taxation Describes Tax Incentives for Domestic Manufacturing

      The Joint Committee on Taxation (JCT) of the US Congress has released a report describing present-law and prior-law tax incentives for domestic manufacturing.

      The JCT report is titled "Tax Incentives for Domestic Manufacturing." The report, designated JCX-15-21, is dated 12 March 2021.

      The JCT report provides descriptions of:

      • present-law income tax rates;
      • rules relating to depreciation, including certain first-year expensing provisions, along with associated recapture provisions;
      • domestic research incentives and the tax credit for certain advanced energy projects that re-equip, expand or establish a manufacturing facility for certain energy-related property;
      • the prior-law deduction for income attributable to domestic production activities under the former section 199 of the US Internal Revenue Code (IRC), which was repealed as part of the Tax Cuts and Jobs Act (TCJA) for taxable years after 31 December 2017; and
      • economic analysis relating to tax incentives for domestic manufacturing.

      Note: The JCT is a non-partisan committee of the US Congress that assists members of the majority and minority parties in both chambers on tax legislation. The Chairman of the Senate Finance Committee and the Chairman of the House Ways and Means Committee chair the JCT on a rotating basis.

  • United Kingdom
    • United Kingdom Outlines Future Tax Administration Strategy on 2021 Tax Day

      Following the 2021 Budget announcement, on 23 March 2021, the United Kingdom published a range of tax administration and policy updates. The aim of the new proposed tax administration and policy measures is to support wider improvements in the UK tax system and include, without being limited to, the following:

      • digitalization of the tax system ("Making Tax Digital") through investment in digital infrastructure;
      • reduction of inheritance tax reporting requirements through simplification of reporting regulations from January 2022;
      • introduction of mandatory professional indemnity insurance for all tax advisers;
      • enactment of measures against promoters of tax avoidance through closing down companies that promote avoidance schemes and disqualifying their directors;
      • adoption of measures to ensure that taxpayers comply with their UK tax obligations regardless of where their income or gains are made ("No Safe Havens");
      • review of business rates, including the overall level of tax, revaluations, administration and billing, and alternatives to business rates;
      • technical updates to the UK pension tax rules;
      • implementation of a UK Emissions Trading System to replace its participation in the EU Emissions Trading System;
      • introduction of new rules to prevent value shifting value added tax (VAT);
      • introduction of sanctions to prohibit tobacco duty evasion and the sale of illicit tobacco;
      • update of the transfer pricing requirements for UK businesses; and
      • extension of the social investment tax relief sunset provision until April 2023.

      Further details can be accessed here.

    • How EEA companies and groups with a presence in the UK can comply with UK accounting and reporting requirements

      Operating as an EEA company and group with a presence in the UK

      Group Accounts

      Intermediate UK parent companies with an immediate EEA parent may not be exempt from producing group accounts. Find out more in the government and Financial Reporting Council (FRCguidance for the accounting sector.

      Annual Accounts

      UK registered dormant companies with an immediate EEA parent need to file individual annual accounts with Companies House for accounting periods beginning on or after 1 January 2021.


      EEA companies with a UK incorporated subsidiary may not be eligible for certain exemptions from preparing and filing accounts.

      The exemption from producing non-financial information statements and alteration of accounting reference dates has been removed for financial periods beginning on or after 1 January 2021.

      Operating as an EEA company with a UK listing

      EEA incorporated groups that issue debt or any other securities, which are admitted to trading on a UK market, can continue to use accounts prepared using EU-adopted international accounting standards (IAS).


      Auditing EEA companies that issue securities that are admitted to trading on a UK regulated market

      Make sure your EEA auditor is registered as either a:

      • statutory auditor in the UK
      • third country auditor on the register maintained by the FRC

      This applies for all accounting years beginning on or after 1 January 2021.

      EEA companies audited by UK auditors and firms that are also registered in EEA countries

      UK auditors’ and audit firms’ registrations as EEA auditors and audit firms may not be valid.

      Find further information on what you need to do if you are a UK auditor or firm with an EEA registration

      Accounting for UK companies in the EEA

      Find out what you need to do if you’re a UK company operating in the EEA.

      Published 31 December 2020
    • United Kingdom: Understanding off-payroll working (IR35)

      The off-payroll working rules

      The off-payroll working rules can apply if a worker (sometimes known as a contractor) provides their services through their own limited company or another type of intermediary to the client.

      An intermediary will usually be the worker’s own personal service company, but could also be any of the following:

      • a partnership
      • a personal service company
      • an individual

      The rules make sure that workers, who would have been an employee if they were providing their services directly to the client, pay broadly the same Income Tax and National Insurance contributions as employees. These rules are sometimes known as ‘IR35’.

      The client is the organisation who is or will be receiving the services of a contractor. They may also be known as the engager, hirer or end client. The client will be responsible for determining if the off-payroll working rules apply.

      Get help on the off-payroll working rules (IR35) with webinars, guidance and resources from HMRC.
      You may be offered schemes that wrongly claim to get around the off-payroll working rules. Find out how to recognise tax avoidance schemes aimed at contractors and agency workers.

      Who the rules apply to

      You may be affected by these rules if you are:

      • a worker who provides their services through their intermediary
      • a client who receives services from a worker through their intermediary
      • an agency providing workers’ services through their intermediary

      If the rules apply, Income Tax and employee National Insurance contributions must be deducted from fees and paid to HMRC. In addition, employer National Insurance contributions and Apprenticeship Levy, if applicable, must also be paid to HMRC.

      You can use the Check Employment Status for Tax service to help you decide if the off-payroll working rules apply.

      Employment status for tax purposes is whether a worker is employed or self-employed. It’s used to determine the taxes the worker and client need to pay.

      When the rules apply

      The rules apply if a worker provides their services to a client through an intermediary, but would be classed as an employee if they were contracted directly.

      The changes to the off-payroll rules were due to come into effect on 6 April 2020. This has now been delayed until April 2021 because of the spread of the coronavirus (COVID-19) pandemic. The delay is to help businesses and individuals deal with the economic impact of coronavirus. The delay to the introduction of the changes is not a cancellation.

      A contract for the purpose of the off-payroll working rules is a written, verbal or implied agreement between parties.

      The off-payroll working rules apply on a contract-by-contract basis. A worker may have some contracts which fall within the off-payroll working rules and some which do not.

      Before 6 April 2021

      If you’re a worker and your client is in the public sector, it’s their responsibility to decide your employment status. You should be told of their decision.

      If you’re a worker and your client is in the private sector, it’s your intermediary’s responsibility to decide your own employment status for each contract. The private sector includes third sector organisations, such as some charities.

      From 6 April 2021

      From 6 April 2021 the way the rules are applied will change.

      All public sector authorities and medium and large-sized private sector clients will be responsible for deciding if the rules apply.

      If a worker provides services to a small client in the private sector, the worker’s intermediary will remain responsible for deciding the worker’s employment status and if the rules apply.

      Source: HM Revenue & Customs

    • Non-UK Resident Companies Investing in UK Property Will Be Subject to Corporation Tax

      On 18 March 2021, HM Revenue and Customs (HMRC) issued further guidance and examples for non-UK resident companies that are party to a derivative contract for the purpose of their UK property rental business.

      In particular, profits and losses from derivative contracts used as part of the United Kingdom (UK) property business are treated in a similar way to loan relationships, meaning that the credit and debit amounts of a derivative contract are included in the calculation of the non-trading loan relationship profit or deficit for the period. In addition, non-UK resident companies carrying out UK property rental businesses may opt into the Disregard Regulations, and hence "disregard" fair value movements and instead bring these amounts into account in line with the hedged item. Further guidance and examples may be found here.

      Until 5 April 2020, non-UK resident companies that carried on a UK property rental business were subject to UK income tax on profits of that business at a rate of 20%. From 6 April 2020, this has changed and those companies have been instead subject to UK corporation tax on their profits (including profits from loans or derivative contracts that a non-UK company has entered into for the purpose of their UK property business) at a rate of 19%.

      This measure formed part of the UK government's objective to align the UK tax treatment of UK and overseas investors in UK property, with the aim of reducing the incentive to hold property through offshore structures.

    • United Kingdom Explains Tax Treatment of Cryptoassets

      On 30 March 2021, HMRC published a manual providing guidance on the tax implications that can arise from transactions involving cryptoassets. The manual consists of the following sections:

      • an introduction, where various definitions are provided, including, without being limited to, cryptoassets, distributed ledger technology, exchanges, public and private keys, and wallets;
      • tax implications for individuals, where clarifications are provided on the circumstances under which individuals are liable to pay income tax or capital gains tax, as well as other taxes, such as inheritance tax; and
      • tax implications for businesses, where clarifications are provided on how HM Revenue and Customs (HMRC) will tax transactions that involve businesses and companies (including sole traders or partnerships).

      HMRC clarifies that, as the underlying technology and the areas in which cryptoassets are used continues to develop, the specific facts of each case will need to be established before applying the relevant tax provisions, while the views expressed in the manual may evolve further.

  • Focus Africa
    • Africa in Review by the Numbers (March 2021)

      $7 billion
      The annual value of Africa's space industry according to the website "Space in Africa". This value is reportedly likely to grow over 40% in the next five years. This is after Tunisia launched its first locally manufactured satellite, making it the sixth on the continent and the first in the Maghreb to do so. (Africanews)  
      Decline in office space rent in Nairobi, according to a recent report by Knight Frank. This decrease, caused by COVID-19 pandemic disruptions, effectively makes Nairobi the cheapest place to rent office space amongst top African cities. (Business Daily Africa)  
      Number of trees that Magnum, a leading chocolate ice cream maker, has committed to planting in Ivory Cost. The Unilever-owned brand plans to plant the trees in the Cavally Forest region as it marks International Day of Forests. (Food Business Africa)  
      $1 billion

      Investment by the Ghana Infrastructure Investment Fund to replace expensive power loans using proceeds from 2020 Eurobond sale. Several independent power producers have agreed to change their feedstock from heavy fuel to gas as part of the deal, which is expected to save the government $5 billion of the lifetime of the power purchase arrangements. (Ghana Broadcasting Corporation)


      Expected rise in Tanzania's sugar production following the approval of six new sugarcane varieties, the first to be produced domestically. Local demand for sugar has been rising on the back of an increase in the number of new industries that use the sweetener as raw material. (The Citizen)

      200 MW
      Solar power plant to be constructed in Egypt with financing from the AfDB, among others. Owned by ACWA Power, the project is expected to lower electricity costs for businesses and residences, as well as reducing greenhouse gas emissions and creating construction and other jobs. The plant is being built at an estimated cost of $156.4 million. (ESI Africa)  
      $200 million

      Value of mobile money business stake sold by Airtel to TPG's global impact investing platform, The Rise Find. The investment will see the mobile money business — Airtel Mobile Commerce BV (AMC BV) — valued at $2.65 billion. (Nairametrics)

      137 million

      The number of Paypal accounts African businesses can connect with after a partnership with Flutterwave. The deal will help overcome the challenges presented by the highly fragmented and complex payment and banking infrastructure on the continent. (Tech Crunch)


      Africa's continental coverage of 23.6 million doses of AstraZeneca vaccine distributed in the continent. The AstraZeneca vaccine, allocated principally via the COVAX facility, accounts for 20.5 million (87%) doses and is the main vaccine used in Africa. (Africa CDC)

    • COVID-19 Pandemic: Rwanda Adopts New Economic Recovery Measures

      The Rwandan government has put into place special incentives to stimulate private sector investment in manufacturing and construction under the initiative dubbed manufacture and build to recover program (MBRP). These measures will help the country's economy to recover from the effects of the COVID-19 pandemic.

      Under the MBRP, registered investors with general construction projects worth USD 10 million and more can benefit from exemptions from value added tax (VAT) and import duties on construction materials not available in the East African Community and an exemption from VAT on locally sourced materials. The MBRP also offers the same incentives for factory construction projects with a value of USD 1 million.

      Further, registered investors in the manufacturing sector can benefit from an exemption from VAT on locally sourced machinery and raw materials.

      It should be noted that incentives under the MBRP are not automatically granted. Qualifying registered investors can submit their application to the Rwanda Development Board (RDB) one stop centre for consideration and/or the incentives committee.

      The measures were announced by the Prime Minister in his address to both chambers of the parliament on 25 March 2021.

    • Federal Government To Review Gas Terms

      The federal government of Nigeria has announced its intention to review, as part of its gas commercialization initiatives, the gas terms under the gas production contracts concluded between the Nigerian National Petroleum Corporation (NNPC) and gas production companies. According to the Director of the Department of Petroleum Resources (DPR), the review will focus on duration, cost of gas, tax gas, royalty gas and profit gas and is expected to be included in the Petroleum Industry Bill, which has been submitted to the National Assembly.

      The review is also expected to be included in the production sharing contracts (PSCs) concluded between the NNPC and international oil companies (IOCs), providing clarity on the fiscal terms. The Deep Offshore and Inland Basin Production Sharing Contract Act, Cap. D3, LFN 2004, which was amended in 2019, provides statutory backing to the PSCs between the NNPC and IOCs.

      Further developments will be reported in due course.

    • Investing in infrastructure for economic recovery in Nigeria: The launch of InfraCorp

      For decades, Nigeria’s inadequate infrastructure has impaired economic growth, and President Muhammadu Buhari has prioritized infrastructure investment in his COVID-19 economic recovery efforts under the Nigerian Economic Sustainability Plan. Last month, he approved the creation of the Infrastructure Corporation of Nigeria (InfraCorp): a new, privately managed infrastructure and industrial vehicle to raise as much as 15 trillion naira ($36.7 billion) to support infrastructure development across the country, with initial capital coming from the Central Bank of Nigeria, the Nigeria Sovereign Investment Authority, and the Africa Finance Corporation. The formation of this new, innovative approach to financing underscores the essential role infrastructure investment will play in Nigeria’s economic recovery from COVID-19.

      Source: Atlantic Council

  • India
    • India’s Promise of a Brighter Future: Smart Cities

      The term “Smart City" was coined in the initial days of the 21st century. It implements user-friendly information and communication technologies developed by major industries for urban spaces. Its meaning has, since, been expanded to relate to the longer-term planning of cities and their development.

      The UN projects that the share of the world’s population living in urban areas will increase to almost 68% by 2050 from 55% currently. This rapid urbanization increases the danger of temperature change and ties up in large cities. Heatwaves – increasingly a reality thanks to global climate change – are worse in large cities where skyscrapers, cars, and paved roads trap the warmth. Additionally, megacities face unique challenges in managing pandemics which the world has recently experienced.

      Cities must therefore become smarter if they need to manage urban growth, public health, and also the challenges that include it effectively. Intelligent decisions must be taken at the strategic level. It takes over individual projects and wishes careful decisions on long-term implementations.

      Around the world, city planners and residents use data-driven technologies, like the Internet of Things (IoT) and AI, to enhance traffic flows, building design likewise as waste and water systems in “smart cities.” MarketsandMarkets, a worldwide research firm, estimates that the industry of smart building technologies will rise from $61 bn in 2019 to $106 bn by 2024.

      The Ministry of Housing and Urban Affairs is the nodal ministry for all policies and funding schemes related to urban development initiatives in the country. The states and cities are responsible for the discharge of the urban functions.

      Key aspects that will influence the urban opportunities in India:

      • Cities contribute about 63% of the GDP and will lead the revival of Indian economy like never before; this is expected to increase to 70% by 2030.
      • Cities will accommodate about 60% of our population and will generate 70% of the new jobs.
      • Indian cities are at different stages of development and are following different paradigms - traditional, modern, and post-modern, needing a 3-level strategy.
      • High-powered empowered committee estimates urban infrastructure investment need at about $40 bn per annum, over a period of 20 years.
      • National Infrastructure Pipeline, developed by the Government of India, has envisaged an expenditure of $1,500 bn in the next five years; the urban infrastructure projects constitute a significant $250 bn.
      • Under our major infrastructure programs and missions, we have invested close to $30 bn in the last 5 years.
      • India’s Smart Cities Mission is focussed on developing 100 cities on the “smart cities principle” - of using digital technology to improve the urban infrastructure and services.

      India has over 4000 urban local bodies and towns, and the opportunities are across core dimensions – housing, sanitation and cleanliness, livelihood, IT, health and education, transport, and environment, and so on. Some of the basic components of a smart city include integrated command and control centre, smart roads and street lighting, smart water systems, security & surveillance systems, etc.

      Huge investment potential exists in the field of urban infrastructure such as metro, rapid rail, buses, electric vehicles, etc. Development and production of various metro components like rolling stock, telecommunication, signalling, electrical & mechanical systems could bring in significant investments.

      Even among the 100 smart cities, India has diversity in terms of size, population, economy, vision, development model, and intangibles.

      The program promotes equity by design. We see potential not only in big cities like Bengaluru, Ahmedabad, Pune, Chennai but also in smaller towns (with political, heritage, or tourism significance) like Namchi, Dharmsala, Satna, and Bihar Sharif.

      Hence these cities have chosen their development models which are a combination of retrofit, redevelopment, and greenfield development.

      Under the Smart Cities Mission, over 5000 projects worth more than $30 bn were identified in these 100 smart cities. It is noteworthy that 1,809 projects worth over $4 bn have been completed.

      To ease the life of its citizens, smart cities have been evolving and progressing into large-scale, ambitious urban expansion projects making technology an integral part of the city's ecosystem.  As technology advances, the concept of smart city has also evolved from merely incorporating technology to becoming futuristic demonstrations of cutting-edge technology themselves.

      The vision behind India's smart cities of building a green, sustainable and resilient futuristic infrastructure is one of its kind. In other words, what India is building today, the world will follow tomorrow.

        Source: Invest India by Utsav Rakshit
    • COVID-19 Pandemic: India Clarifies Residence Status of Certain Individuals

      The Central Board of Direct Taxes (CBDT) has clarified that an individual forced to stay in India due to travel restrictions and who is facing double taxation on income for previous year (PY) 2020-21 may furnish relevant information of his circumstances to the CBDT for the purpose of claiming double tax relief.

      Based on the submitted information, the CBDT will examine:

      • whether any relaxation is required to be provided; and
      • if required, whether general relaxation is required for a class of individuals or specific relaxation is required for individual cases.

      The required information must be submitted electronically via Form-NR by 31 March 2021.

      The CBDT has initially clarified that the possibility of double taxation of an individual's PY 2020-21 income does not exist when taking into consideration the provisions of the Income Tax Act read in conjunction with tax treaties. However, in the interest of understanding possible situations of double taxation, the CBDT will allow affected individuals to submit their relevant information.

      The CBDT previously clarified that the period of stay in India of certain individuals will not be taken into account in determining the individual's residence status for the PY 2019-20, subject to conditions.

      Full details are available here.

    • Basic Customs Duty: The piece that completes India’s vision of Atmanirbhar in solar manufacturing

      On 9th March, the Ministry of New & Renewable Energy (MNRE) declared the imposition of Basic Customs Duty (BCD) on Solar PV Cells and Modules/Panels, w.e.f. April 2022, following the 20 per cent BCD on solar inverters, announced earlier by the Hon’ble Finance Minister in the union budget 2021-22. If you read the Office Memorandum (OM) detailing the BCD on solar cells and modules, you can sense the urgency and need of this step, a long-standing demand by the industry. By all accounts, India’s solar industry is dependent on imports currently. China accounts for at least 80 per cent of all the modules imported into India and the rest comes from Malaysia, Thailand, and Vietnam. This import trend from China (and other countries) has been continuing for a while. Factors that underpin this massive imbalance (in favor of China) include the lower prices of these Chinese imports equipped with their superior quality, in terms of efficiency, wattage, etc., and backed by warranty from international insurers on high-performance modules. This, in turn, produced no incentive for the Indian developers/power producers to rely on domestic manufacturers, straining the government’s effort to indigenize the solar value chain further. If the price was one aspect, then the existing capacity of Indian manufacturers becomes the other face of this riddle. India’s capacity for module and cell stands at 15 GW and 3 GW, respectively. India roughly has 40 to 45 per cent of capacity utilization. India’s production capacity then becomes pale in comparison with China, as evident:


      Now let us look at the Indian demand for cells and modules. India has a target to achieve an installed solar energy capacity of 280 GW i.e., around 25 GW every year till 2030. Compare this with the capacity that the domestic industry possesses, currently, it will become clear why developers/power producers are preferring imports, significantly.

      It is here that the planned BCD of 25 per cent on Solar Cells and 40 per cent on Solar Module becomes a gamechanger. Once the new duty structures come into force  the costs of imported cells and modules will increase, thereby removing the cost advantage attached to the imports and increasing the reliance on the domestic industry. Further up in a solar project chain, BCD will have a knock-on effect on solar tariffs as well. For imported modules, BCD will increase the capital cost of a solar project by 23-24 per cent, resulting in an increase of 25 per cent in solar tariffs . MNRE has also released the Approved List of Models and Manufacturers of PV Modules (ALMM), whose modules will be eligible for government-owned projects in India, further increasing the industry’s confidence in domestic suppliers. Additionally, the $ 606 Mn Production-Linked-Incentive (PLI) scheme for high-efficiency PV modules, launched last year, will further incentivize the capacity enhancement of the domestic module manufacturers.

      India is on a relentless pursuit of achieving self-reliance in critical sectors of its economy. The challenges from COVID-19 further emboldened its resolve in becoming a manufacturing superpower and cutting dependencies. The newly announced BCD, ALMM, and PLI will accelerate the much-needed indigenization of the solar industry and help India become 'Atmanirbhar' in solar manufacturing.

      Source: Invest India

  • United Arab Emirates
    • UAE retail sales forecast to hit $58 billion in 2021: analysis

      Retail sales in the UAE are expected to rebound and grow by 13% to reach $58 billion by the end of 2021, supported by pent up consumer demand in the second half of the year, Covid-19 vaccination efforts and Expo 2020 Dubai, new analysis from Dubai Chamber of Commerce and Industry has projected. 

      The analysis, based on recent data from Euromonitor, predicted that UAE retail sales are forecast to maintain 6.6% annual growth in the medium term to reach $70.5 billion by 2025, with store-based retailing growth forecast at a CAGR of 5.7%, while non-store retailing is forecast to grow at a CAGR of 14.8%.

      Progress related to the UAE’s vaccination campaigns is expected to boost demand in the second half of this year and attract consumers and tourists back to traditional stores. Expo 2020 Dubai, scheduled to kick off in Dubai this October, is expected to be a major catalyst for the recovery of the retail sector, in addition to the support and incentives provided by governments to business sectors at the federal and local levels.

      The UAE currently leads the Middle East and North Africa region in terms of household spending on e-commerce at $2,554 per household, which is twice the value of the global average of $1,156, and four times the value of the average in the MENA region ($629).

      According to JLL, Dubai saw 110,000 square metres (sqm) of retail gross leasable area (GLA) completed in 2020, which brings the emirate’s total retail stock to 4.2 million sqm.

      Meanwhile, Abu Dhabi retail space stock remained unchanged at 2.8 million sqm. During 2021, Dubai is expected to see 761,000 sqm of retail GLA added to the market, while 293,000 of new retail GLA is expected in Abu Dhabi by the end of the year.

      As new retail space in the UAE continues to come online in the short term, the market has become more favourable to tenants, due to expected lower rents and more available options, a trend which should support the recovery of retail businesses.

      The analysis added that the Covid-led digital shift has created new growth opportunities for regional expansion for traditional retail and e-commerce companies based in the UAE, especially in markets with large populations, such as Saudi Arabia, Egypt, Algeria and Morocco.

    • Tax Authority Details Conditions for VAT Adjustments on Bad Debt Relief

      The UAE Federal Tax Authority (FTA) has confirmed conditions to be met in order for a supplier to benefit from the VAT bad debt relief scheme. The four conditions are as follows:

      • The goods and services should have been supplied and VAT on the supply should have been charged and accounted for. The FTA considers that this condition will be satisfied where the supplier has charged VAT on the tax invoice and has also accounted for VAT to the FTA via its tax returns.
      • The consideration for the supply should have been written off in full or in part as a bad debt in the accounts of the supplier. It is important to note that the bad debt relief can only be taken to the extent of the consideration written off in the accounts.
      • A 6-month period should have passed from the date of the supply. A supplier must wait for 6 months from the date of supply to initiate the process of bad debt adjustment. The FTA considers that during the course of these 6 months, the supplier should engage with the customer to recover the debt and collect the outstanding amount.
      • The supplier should have notified the customer of the amount of consideration for the supply that has been written off. The FTA considers that the notification issued to the customer must at least contain the following information in addition to any other information that the supplier may choose to include:
        • invoice number and date of the tax invoice which has not been paid by the customer; and
        • amount of consideration that has been written off by the supplier.

      It should be noted that there is no specific method to notify the customer. Notification can be sent through a letter, email, etc. by post or any other similar communication.

      The FTA published public clarification VATP024 related to adjustments on account of bad relief on 29 March 2021. It provides guidance on the application of provisions of article 64 (1) of Federal Decree-Law No. (8) of 2017 on Value Added Tax.

    • Tax Authority Announces VAT Application on Supplies and Services Provided by Artists and Social Media Influencers

      The Federal Tax Authority (FTA) has confirmed that VAT applies to supplies and services provided for consideration by artists and social media influencers (SMIs). The FTA specified that such supplies and services include inter alia:

      • online promotional activities performed on behalf of other businesses (such as product promotion in a blog or a video, or the promotion of a business on a social media post);
      • physical appearances, marketing and advertising related activities;
      • providing access to any social media influencers' networks on social media, and
      • any other services provided by SMIs for a consideration.

      The FTA specified that artists and SMIs based in the UAE and making taxable supplies (including zero-rated supplies), are required to register for VAT (provided the value of their taxable supplies and imports reaches the mandatory registration threshold of AED 375,000 in the last 12 months). They may also voluntarily register for VAT if the value of their taxable supplies and imports or taxable expenses incurred in the last 12 months exceeded, or is expected to exceed in the next 30 days, the voluntary registration threshold of AED 187,500.

      The FTA also specified that for the purposes of computing the threshold, artists and SMIs should take into consideration all the taxable supplies they made, even if such supplies do not fall within the scope of their core artistic or influencer activity. Artists and SMIs must issue tax invoices for all supplies subject to the standard rate of 5%.

      The FTA clarified that if a non-resident artist or SMI contractually provides services to a VAT registered recipient in the UAE, the non-resident artist or SMI would not be required to register for VAT in the UAE (the UAE resident recipient of such services would have to account for VAT under the reverse charge mechanism). Where an artist or SMI provides services to unregistered UAE-based individuals or businesses, and the place of supply falls within the UAE, there is no registration threshold. Therefore, where an artist or SMI provides any services to such an unregistered recipient, they will be required to register for VAT in the UAE and charge VAT on the related supply.

      The FTA confirmed that the VAT implications of artists and SMIs supplies should be assessed on a transaction-by-transaction basis.

      The FTA announcement was published in the latest Basic Tax Information Bulletin on 7 March 2021 in the FTA's official website.

      Note: The FTA launched the Basic Tax Information Bulletins to provide guidance to businesses and taxpayers with regard to the application of laws, executive regulations and tax procedures.

  • Switzerland
    • Switzerland introduces the concept of relative market power and restricts geoblocking

      On Friday, 19 March 2021, the Swiss parliament adopted in its final vote the amended parliamentary counter-proposal to the popular initiative "Stop the high price island - for fair prices". This counter-proposal to what is known as the Fair Price Initiative will lead to two major amendments to Swiss law. Firstly, the concept of relative market power will be introduced into the Cartel Act (CartA) by including the definition of relative market power and a new type of abuse. Secondly, a ban on geoblocking will be included in the Federal Act against Unfair Competition (UCA). These new provisions are expected to enter into force before the end of 2021, provided that no referendum against them is launched. The Fair Price Initiative was launched in 2017 with the aim of combating high prices in Switzerland. However, the question of whether the provisions initiated were the right ones for this purpose became a point of controversy in the media and among experts. It is expected that the implementation of these provisions will require further clarification for many companies and adjustments to business practices and internal compliance standards.

      Introduction of the concept of relative market power

      The new concept of relative market power makes companies on which other companies are dependent subject to the regulation of Art. 7 CartA. As a result, the provisions on abuse of dominance will in the future not only apply to companies with a dominant position, but also to companies with relative market power. With the introduction of this concept, the CartA will no longer only protect effective competition, but also individual dependent companies.

      A situation of dependency emerges where customers or suppliers have no actual or reasonable alternative. However, general statements about the existence or non-existence of relative market power cannot be made. Similar to the question of a dominant market position, a case-by-case examination will be necessary in each situation. In contrast to market dominance, the assessment is not limited to an analysis of the position on a specific market, but instead concerns the individual relationships between individual companies. In extreme cases, this could even apply to a single product or a specific service. Considering the legal uncertainty that comes with the concept of relative market power, it is crucially important to companies that a violation of the new provisions, other than cases of abuse of dominance, is not subject to direct sanctions under Art. 49a CartA. Fines are only imposed in the event of repeated infringement.

      A comparison with other legal systems reveals that the concept of relative market power is not entirely new. Germany has already had regulations in place for about 50 years. However, a look at the situation with this neighbour reveals that even after decades of established practice, questions and ambiguities still exist and keep the courts and competition authorities busy. The German practice has developed the following categories of relative market power:

      • assortment-related dependence;
      • company-related dependence;
      • relative buyer power; and
      • shortage-related dependence.

      Assortment-related dependence means a retailer must have a product in stock to be competitive at all. These constellations are also referred to as 'must-in-stock products'. In contrast, relative buyer power refers to the dependence of a supplier on a purchaser since the supplier does not have sufficient possibilities to switch to other purchasers. In the context of the revision of German competition law at the beginning of this year (i.e. the "GWB-Novelle"), the German legislator also introduced two new relative market power categories of data-related dependency and relative intermediation power. In this context, particular access to relevant data from a competition point of view and a key position in the mediation of services are relevant. The German practice and its categories could help companies make an assessment under Swiss law as long as there is no corresponding practice by the Swiss authorities. However, as in Germany, a case-by-case assessment of possible complex dependency relationships will be the standard in Switzerland.

      As a result of the introduction of the new provisions on relative market power, the scope of the existing Art. 7 CartA will be extended considerably. This is also expected to have a significant impact on the distribution concept of not only large companies, but also of many SMEs. Types of behaviour that are permissible under current rules could be prohibited under the new regime. This applies in particular to price differentiations, rebate systems or the rejection of business relationships with certain distribution partners.

      The Swiss heritage clause, which was originally included in the popular initiative, was deleted without replacement. As a result, the new provisions also apply to all companies domiciled in Switzerland with a potential relative market power.

      New type of abuse

      In addition, the implementation of the counter-proposal adds a new type of abuse to Art. 7 CartA. According to the new Art. 7 para. 2 lit. g CartA, a company with market dominance or relative market power is also behaving abusively if it restricts the ability of customers to purchase goods or services offered in Switzerland and abroad at the prices and conditions prevailing abroad. Thereby, the legislator creates a right for Swiss companies to purchase abroad at the conditions applicable there.


      Due to the limited impact on overall competition, claims against companies with relative market power are likely to be assessed primarily by the civil courts. On 16 March 2021, the President of the Swiss Competition Commission stated in the context of the reconciliation of differences in parliament that the competition authority will aim at issuing relatively quick decisions allowing for categorisation into different groups of cases. Beyond that, complainants would be referred to the civil courts. It remains to be seen whether the affected companies will be prepared to make greater use of civil proceedings in the event of infringements by companies with relative market power, considering that civil law proceedings are – in the context of competition law – still rarely used in Switzerland due to their inherent risks.

      Prohibition of geoblocking

      The new Article 3a, which is to be introduced into the UCA in the course of the revision, has the same objective as the new Art. 7 para. 2 lit. g CartA. The intention of Article 3a UCA is to enable customers in Switzerland to shop online without discrimination across national borders (i.e. a ban on geoblocking). Unlawful discrimination occurs when foreign online retailers deny customers in Switzerland access to their stores, deny access to presumably lower foreign conditions or re-route them to other versions of the store.

      Need for action for companies

      Companies are advised to analyse their distribution structures and their relationship with business partners from the new perspective of a potential relative market power. In particular, this assessment should be made principally in view of a potential relationship of dependency within the meaning of the concept of relative market power and that it can exist in relation to another undertaking with regard to each individual product or service.

      Depending on the results of this assessment, chances or risks may arise for affected companies. If such an assessment indicates dependencies, one should decide as a second step whether to adjust the business relationship with the respective party. In practice, the focus is likely to be on constellations such as the initiation or termination of business relationships, unequal conditions vis-à-vis different business partners, rebate systems or exclusivities. In addition, companies that offer goods in Switzerland and abroad will have to review their pricing policy and other terms and conditions when receiving enquiries from Switzerland.

      Finally, any measures that may lead to a discrimination of customers in Switzerland, such as price discrimination, blocking visits to retail websites or an automated re-routing to alternative sites, should be reviewed and, if necessary, removed.

        Source: CMS Switzerland - Marquard ChristenPatrick SommerFabian Martens and Hadi Mirzai
  • China
    • GAC Unveils Customs Measures on Applying “Zero Tariff” to Imports of Production Equipment at Hainan Free Trade Zone

      The General Administration of Customs released on March 4, 2021 the Customs Measures for the Implementation of the "Zero Tariff" Policy on Imports of Self-use Production Equipment at Hainan Free Trade Port (Trial), with a view to implementing the said measures. The Measures were implemented from the release date.

      According to the Measures, self-use production equipment eligible for the "zero tariff" shall be subject to the management system of "one firm, one account". Eligible firms should register with the customs in accordance with the relevant rules before declaring for the first time the "zero-tariff” and shall complete the enterprise account information in the designated platform. Self-use production equipment imported with "zero tariff" shall be used by firms in the free trade zone that meet the prescribed conditions for their own use, and shall be subject to customs supervision by law for a period of three years.

    • Three Authorities Release Negative List on “Zero Tariff” Policy for Importing Self-use Production Equipment into Hainan Free Trade Port

      The Ministry of Finance, the General Administration of Customs and the State Taxation Administration released on March 4, 2021 the Circular about "Zero Tariff" Policy for Importing Self-use Production Equipment into Hainan Free Trade Port, with immediate effect.

      According to the circular, before the entire island is sealed off, companies registered at Hainan Free Trade Port will not have to pay tariff, import value-added tax and consumption tax for importing self-use production equipment, unless tax exemptions are outlawed or the equipment is not permitted to be imported into China, or the equipment is on the list of a negative list. The list includes self-use production equipment imported by companies in 11 industries, and it will be adjusted from time to time based on actual needs and regulatory conditions.

    • CBIRC Revises Implementation Rules on Regulation of Foreign-Funded Insurance Companies

      China Banking and Insurance Regulatory Commission released on March 19, 2021 the Decision about Revising the Detailed Rules for the Implementation of the Regulation of the People's Republic of China on the Administration of Foreign-Funded Insurance Companies. The revisions have further clarified the market access standards for foreign insurance groups and foreign insurance companies backed by foreign financial institutions.

      There are three prominent revisions. The first is to specify market access conditions for foreign insurance groups and foreign financial institutions; the second is to optimize shareholder change and access requirements; the third is to maintain consistency and scrap restrictions on foreign shareholding in foreign-funded insurance companies. Foreign insurance groups can hold up to 100% stake at foreign-funded insurance companies.

    • STA Streamlines Tax Return Form for the Monthly (Quarterly) Prepayment of Enterprise Income Tax

      In order to continue to reduce burden on taxpayers, the State Taxation Administration recently updated the Tax Return Form of the People's Republic of China for the Monthly (Quarterly) Prepayment of Enterprise Income Tax (Type A).

      The new form has reduced the number of annexed sheets and optimized the columns. A large majority of corporate taxpayers have to fill only one form of tax return to complete tax declaration, so that they can reduce workload in dealing with tax affairs.

      Resident enterprises that make tax prepayment on a monthly basis will begin to use the new form from March 2021; resident enterprises that make tax prepayment on a quarterly basis will begin to use the new form from the first quarter of 2021.

    • China promotes digitalization of foreign trade

      China is promoting the digitalization of foreign trade by holding its first cross-border e-commerce trade fair in Fuzhou, East China's Fujian province.

      The trade fair aims to address the bottlenecks and pain points in cross-border trade due to the COVID-19 pandemic.

      The fair consists of four exhibition areas, including cross-border e-commerce comprehensive platform, cross-border e-commerce service providers, cross-border e-commerce suppliers and cross-border e-commerce brand publicity.

      About 2,363 companies participated in the fair, covering 33 cross-border e-commerce platforms around the world, People's Daily reported.

      Statistics indicate the intended transaction amount reached more than $3.5 billion during the 3 days of the exhibition.

      Source: China Daily

    • Digital yuan pilots making steady progress: official

      China's digital yuan pilots and tests are making steady progress, according to a researcher under the People's Bank of China, the country's central bank.

      During a summit at the China Development Forum 2021, Mu Changchun, head of the central bank's digital currency research institute, dismissed concerns of user privacy infringement, saying the digital currency has the highest level of privacy protection among existing payment tools.

      China's digital yuan, although still in its pilot phase, will include more people in the rapidly developing digital era, making daily life easier and digital payments more secure.

      The digital currency will be issued by the country's central bank and legally backed by the government as an alternative to paper money.

      China will steadily advance the research and development of digital currencies and actively participate in the formulation of international rules and technical standards on data security, digital currencies and data tax, according to the outline of the country's 14th five-year plan for national economic and social development and the long-range objectives through the year 2035

      Other countries including Canada and Japan have also been gearing up preparations for digital currencies.

      "The use of cash will be reduced by at least 40 percent in the coming decade," predicted Zhu Min, chairman of the National Institute of Financial Research at Tsinghua University, as central bank-backed digital currencies will become more common globally.

        Source: Xinhuanet
    • Official: China to fully honor RCEP obligations

      China will be able to completely fulfill its obligations under the Regional Comprehensive Economic Partnership when the agreement enters into force, a Ministry of Commerce official said on Monday.

      All 15 members of the RCEP are planning to ratify the agreement before the end of 2021 and push for it to take effect on Jan 1, said Yu Benlin, director-general of the Ministry of Commerce's Department of International Trade and Economic Affairs.

      China has completed the approval process and became the first country to ratify the agreement, he said, adding that Thailand has also ratified the agreement.

      All member parties will convene intensive meetings to report on the progress of their respective approval processes this year, he said.

      The ministry and related departments have conducted work involving the 701 binding obligations of the Chinese side related to the RCEP. Through the efforts of various government branches such as the National Development and Reform Commission and the General Administration of Customs, China's preparations for the implementation of 613 items have been completed, accounting for 87 percent of all obligations, he said.

      The official said preparation for other items can also be concluded before the implementation of the agreement.

      The RCEP, which includes China, Japan, South Korea, Australia, New Zealand and the 10 members of the Association of Southeast Asian Nations, represents the world's largest free trade agreement. It covers a third of the global population and 30 percent of the world's GDP, according to Commerce Ministry data.

      After China and its partners signed the RCEP agreement late last year, the deal will come into force if at least nine members enact it, including at least six members of ASEAN, and at least three countries out of the other five non-ASEAN members, Yu added.

      Once the RCEP takes effect, countries will immediately reduce tariffs in accordance with the agreement, fulfill their commitment to open investment in the service sector, and implement the rules in all areas of the pact, said Jiang Feng, director-general of the Department of Duty Collection at the GAC.

      As China and its partners signed the RCEP agreement and it plans to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Michael Lai, general manager of China operations at AstraZeneca, the British multinational pharmaceutical company, said these moves will pave the way for the company to ship more products manufactured from its plants in Jiangsu province to other Asia-Pacific markets.

      "Benefiting from the RCEP, we can make full use of the resources from the same economic region for production. It will be easier for the drugs to obtain the original qualification of the contracting countries, and finally enjoy more preferential tariff rates and trade treatment," he said.

      The implementation of the RCEP rules can stabilize and optimize value chains in the Asia-Pacific region between participating countries, in particular developing nations, said Wei Xiaoquan, a researcher specializing in regional economic development at the University of International Business and Economics in Beijing.

      China and New Zealand signed an upgraded protocol of their bilateral free trade agreement in January to improve the level of market opening based on the RCEP pact.

      The GAC said on Monday that China's imports of New Zealand goods that get tariff reduction and exemption maintained an average annual growth rate of 23.1 percent since 2009.

      In addition, following the implementation of the China-New Zealand Free Trade Agreement in October 2008, duties totaling 28.39 billion yuan ($4.36 billion) were exempted from China's imports of New Zealand goods.

      Source: China Daily