On 22 May 2018, the Customs Tariff Commission of the State Council issued Shui Wei Hui  No. 3 (“Circular 3”). This clarifies that, from 1 July 2018, import tariffs rates on automobiles and auto parts will be reduced.
The reduction of import tariffs is in line with a keynote speech made by Chinese President Xi Jinping at the opening ceremony of the Boao Forum for Asia (BFA) Annual Conference on 10 April 2018. President Xi highlighted that, China will significantly reduce import tariffs for imported automobiles (currently 25%) in 2018. Reduction of import tariffs, at the same time, will also apply to certain imported products (such as foodstuffs, cosmetics, garments). China will increase imports to take account of consumer needs and seek faster progress towards joining the WTO Government Procurement Agreement (see KPMG China Tax Weekly Update (Issue 15, April 2018) for details).
In particular, Circular 3 clarifies the following:
With regard to Circular 3’s impacts on the automobile industry please read the following KPMG publication:
On 23 March 2018, the Ministry of Finance (MOF) and State Administration of Taxation (SAT) jointly issued Cai Shui  No. 57 (“Circular 57”). This extends the existing land appreciation tax (LAT) incentive for restructuring of enterprises as set out in 2015-issued Cai Shui  No. 5 (“Circular 5”), which was due to expire on 31 December 2017.
According to Circular 57, the LAT exemption will continue for a period of three years, i.e., from 1 January 2018 to 31 December 2020, for the following restructuring activities:
In addition, Circular 57 also clarifies the following:
On 17 May 2018, the United Nations (UN) released the 2017 edition of United Nations Model Double Taxation Convention between Developed and Developing Countries (“2017 UN MTC”). The relevant updates in the 2017 UN MTC were agreed at the April 3-6 2017 UN Committee session in New York (see KPMG China Tax Weekly Update (Issue 15, April 2017) for details).
The most important changes, compared with the 2011 edition, are as follows: