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As highlighted in KPMG China Tax Weekly Update (Issue 34, September 2016),on 29 August 2016, the 12th National People‘s Congress (NPC) initially discussed the draft environmental protection tax law (Draft).
On 25 December, Law of the People’s Republic of China on EnvironmentalProtection Tax (“the Law ”) was approved by NPC, and will apply from 1January 2018, replacing the pollution fee currently levied by local governments.
Taxpayers |
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Taxable subjects,taxable objects and tax base |
* The Law comprises a detailed rate table and the rules onrecognizing of pollution units. |
The principle of such legislation is that the tax burden will not be increased afterthe conversion from pollutant discharge fee to tax, by way of adopting the current standards for pollutant discharge fees, as well as rendering the payersof pollutant fees as taxpayers of Environmental Protection tax. “The fee to tax conversion” reform is one of major pieces of taxation reforms in China for 2016, being the fifth taxation law coming after the Law of the People's Republic of China Concerning the Administration of Tax Collection, Corporate Income Tax Law of the People's Republic of China, Individual Income Tax Law of thePeople's Republic of China, and Vehicle and Vessel Tax Law of the People'sRepublic of China.
As highlighted in KPMG China Tax Weekly Update (Issue 25, July 2016), (Issue 26, July 2016), (Issue 33, August 2016) ,(Issue 37, September 2016) , (Issue 41, November 2016), and (Issue 48, December 2016), the Organisation for Economic Cooperation and Development (OECD) has continued to release new policy documents for the continuity of BEPS work subsequent to the issuance of the October 2015 BEPS Deliverables. Recently, the OECD have further released several documents in relation to BEPS work on their official website. These releases fall within the Common Reporting Standard (CRS) and additional guidance on Action 4 of the BEPS Action Plan.
*China committed to CRS already in 2014 and subsequently signed the CRS MCAA. China is committed to engage in the first information exchange in September 2018. though it has yet to nominate the countries with which it wishes to engage in information exchange through the CRS MCAA.
To prepare for the 2018 start of CRS exchanges, on 14 October 2016 the State Administration of Taxation (SAT) published a discussion draft on “Due Diligence Administrative Measures on Non-residents’ Financial Account Information in Tax Matters” for public comments (“the Discussion Draft”). The Discussion Draft published provides the principles and procedures for Chinese financial institutions in identifying the accounts of non-residents and collecting the relevant information. For more information, you may click our following KPMG publications for details:
On 26 December 2016, SAT released China Advance Pricing Arrangement Annual Report (2015) (“2015 APA Report”), which was promulgated in both Chinese and English version. 2015 APA Report introduce the APAs statistics concluded from 2005 to 2015, professional team building, key considerations and schedules of the APA program in China for 2015.
According to the report:
*SAT issued notice on the Enhancement of Administration of Advance Pricing Arrangement (APA) (“Announcement 64”) , clarified matters on APA. For more specific changes and impacts of requirements on Announcement 64, please refer to the following links:
On 27 December, the State Administration for Industry and Commerce (SAIC) issued Gong Shang Qi Zhu Zi [2016] No.253 (“Circular 253”), which requires to streamline the de-registration procedures nationwide for enterprises, effective from 1 March 2017.
As highlighted in KPMG China Tax Weekly Update (Issue 1, January 2016) , CaiShui[2015] No. 119 and SAT Announcement 97 clarified detailed implementation standards regarding R&D expenses super deduction (“Super Deduction Policies”, which apply to the Corporate Income Tax (CIT) annual filing for 2016 and afterwards.
On 21 December 2016, SAT issued notice on R&D super deduction (Shui Zong Han[2016] No.685), which emphasizes:
* For more detail analysis of R&D super deduction policies, please refer to thefollowing KPMG publications:
As highlighted in KPMG China Tax Weekly Update (Issue 49, December 2016), on 21 December, China’s Ministry of Finance (“MOF”) and SAT jointly issued Cai Shui [2016] No.140 (“Circular 140”), clarified a number of uncertainties which have arisen in practice. In respond of Circular 140, on 24 December 2016, SAT released SAT Announcement[2016] No.86 (“Announcement 86”) to further clarify the issues identified in practice emerged, effective from 24 December 2016. Announcement 86 mainly clarifies the following details:
*For more detail analysis and specific impacts of it on enterprises of Circular140, please refer to the following link:
As highlighted in KPMG China Tax Weekly Update (Issue 42, November 2016), on 1 November 2016, China and Malaysia signed an Exchange of Notes (EoN) to the A greem ent between the Governm ent of the People’s R epubli c of C hina and the Government of Malaysia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (“The EoN”), in Beijing.
On 19 December 2016, SAT issued SAT Announcement [2016] No. 84, promulgated the full text of the EoN, effective from 1 November 2016. Interest arising in a Contracting State derived by the Government (including specified institutions wholly owned by the respective Governments) are eligible for tax exemption of the China-Malaysia DTA signed in 1985. The EoN clarifies the list of institutions wholly owned by the respective Governments.
On 24 December 2016, China issues notice on adjustment of tariff for year 2017 (Shui Wei Hui[2016] No. 64), making adjustments on import and export duties, effective from 1 January 2017.
You may click here to access the full content of the circular.
On 5 December 2016, MOF, GAC and SAT jointly issued Cai Guan Shui[2016] No. 62(“ Circular 62”), deciding that during 13th 5-year period, which is from 1 January 2016 to 31 December 2020, to take continuing efforts to implement tax incentives (such as exempted from imported tariff, and VAT) for the imported new-type display device along with upstream raw materials as well as certain goods imported by parts manufacturer. Circular 62 also clarifies lists of abovementioned goods exempted from imported taxes.
You may click here to access the full content of the circular.
On 12 December 2016, SAT issued SAT Announcement [2016] No. 85 (“Announcement 85”), releasing the tax stamps version 2016. Announcement 85 clarifies stamps pattern, stamps sizes and packages, stamp anti- counterfeiting measures as well as distributing amount. Meanwhile, Announcement 85 explicates that the tax stamps issued in previous years still valid in the future.
You may click here to access the full content of the circular.
* With respect to the List of Key Tax Policies in the first half of 2016, you may click to access KPMG China Tax Weekly Update (Issue 25, July 2016).
Tax | Regulation | Effective date | link |
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International Tax |
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N/A | China Tax Weekly update Issue 40, 2016 China Tax Alert Issue 32, 2016 China – Looking Ahead, 6th Edition (BEPS in China – multi- track developments) |
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N/A | China Tax Weekly Update Issue 26, Issue 34, Issue 35,Issue 41 and Issue 45 China Tax Alert Issue 35 |
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9 August 2016 | China Tax Weekly update Issue 31, 2016 | |
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9 April 2016 | China Tax Weekly Update Issue 30, 2016 | |
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1 July 2016 | China Tax Weekly update Issue 30, 2016 | |
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8 August 2016 | China Tax Weekly update Issue 48, 2016 | |
Transfer Pricing |
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Year 2016 and afterwar ds | China Tax Weekly update Issue 27, 2016 China Tax Alert Issue 23, 2016 China – Looking Ahead, 6th Edition (China transfer pricing – first mover onBEPS) |
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1 Decemb er 2016 | China Tax Weekly update Issue 40, Issue 44, 2016 China Tax Alert Issue 28, 2016 |
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N/A | China Tax Weekly update Issue 44, 2016 | |
Corporate Income Tax |
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1 January 2016 | China Tax Weekly Update Issue 44 , Issue 47, 2016 |
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1 September 2016 | China Tax Weekly update Issue 37 and Issue 38, 2016 China – Looking Ahead, 6th Edition (Tax to the aid of innovation and entrepreneurshi p in China) |
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5 December 2016 | China Tax Weekly Update Issue 46, 2016 Hong Kong Tax Alert Issue 14, 2016 |
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1 May 2015 | China Tax Weekly Update Issue 43, 2016 |
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1 January 2016 | China Tax Weekly Update Issue 45, 2016 | |
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1 January 2016 | China Tax Weekly Update Issue 48, 2016 | |
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9 December 2016 | China Tax Weekly Update Issue 48, 2016 | |
Value Added Tax |
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1 May 2016 | China Tax Weekly Update Issue 26, Issue 34, Issue 45, Issue 46 and Issue 49, 2016 China Tax Alert Issue 20 and Issue 18, 2016 China Tax Weekly Update Issue 1, 2017 China – Looking Ahead, 6th Edition (Post VAT reform in China – what’s next?) |
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1 January 2016 | China Tax Weekly Update Issue 49, 2016 | |
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1 May 2016 | China Tax Weekly Update Issue 48, 2016 | |
Consumption Tax |
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1 October 2016 19 October 2016 |
China Tax Weekly Update Issue 38 and Issue 41, 2016 |
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1 December 2016 | China Tax Weekly Update Issue 46, 2016 | |
Stamp Duty |
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1 January 2017 | China Tax Weekly update Issue 47, 2016 |
Individual Income Tax |
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1 September 2016 | China Tax Weekly update Issue 37 and Issue 38, 2016 China Tax Alert Issue 38, 2016 |
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5 December 2016 | China Tax Weekly Update Issue 46, 2016 Hong Kong Tax Alert, Issue 14, 2016 |
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Tax Admin |
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8 July 2016 1 September 2016 19 August 2016 1 December 2016 |
China Tax Weekly Update Issue 27, Issue 29, Issue 44 and Issue 45, 2016 China Tax Alert Issue 28, 2016 China – Looking Ahead, 6th Edition (China tax – big data and beyond) |
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1 January 2017 | China Tax Weekly Update Issue 48, 2016 | |
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1 October 2016 | China Tax Weekly Update Issue 26, 2016 | |
NPC Legislation |
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1 January 2018 | China Tax Weekly Update Issue 1, 2017 |
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N/A | China Tax Weekly Update Issue 49, 2016 | |
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1 June 2017 | China Tax Weekly Update Issue 43, 2016 | |
Forex Administra tion |
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25 January 2016 3 May 2016 27 May 2016 3 February 2016 5 Septemb er 2016 9 June 2016 |
China Tax Weekly Update Issue 38, 2016 |
Customs |
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1 October 2016 | China Tax Weekly Update Issue 26, Issue 38, 2016 China Tax Alert Issue 21, 2016 China – Looking Ahead, 6th Edition (China Customs – pushing the boundaries) |
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1 November 2016 1 Decemb er 2016 |
China Tax Weekly Update Issue 42 and Issue 46, 2016 China Tax Alert Issue 30, 2016 |
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1 September 2016 1 Novemb er 2016 |
China Tax Weekly Update Issue 31 and Issue 40, 2016 | |
Corporate Investment |
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1 October 2016 8 October 2016 |
China Tax Weekly Update Issue 35, Issue 37, Issue 39 and Issue 47, 2016 |
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21 October 2016 | China Tax Weekly Update Issue 42, 2016 | |
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1 February 2017 20 Decemb er 2016 |
China Tax Weekly Update Issue 48 and Issue 49, 2016 | |
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N/A | China Tax Weekly Update Issue 28, 2016 China Tax Alert Issue 24, 2016 |
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Others |
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13 August 2016 8 Septemb er 2016 |
China Tax Weekly Update Issue 28 and Issue 36, 2016 |
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2 November 2016 | China Tax Weekly Update Issue 34 and Issue 44, 2016 |