On 23 March 2018, the Ministry of Finance (MOF) and State Administration of Taxation (SAT) jointly issued Cai Shui  No. 53 (“Circular 53”). This extends the existing value-added tax (VAT) incentive for enterprises engaging in defined ‘cultural publicity’ activities (such as publishing, books wholesale) as set out in 2013-issued Cai Shui  No. 87 (“Circular 87”), which was due to expire on 31 December 2017.
According to Circular 53, the VAT incentives will continue for a period of three years, i.e., from 1 January 2018 to 31 December 2020, as follows:
Currently, where an e-publication is deemed as a software product, it is subject to VAT “refund-upon-levy” policy, i.e. the portion of the effective tax burden in excess of 3% shall be refunded upon collection of VAT. In this regard, Circular 53 clarifies that if an e-publication has enjoyed the “refund-upon-levy” policy, then the VAT “levy first, then refund later” will not be applied.
In 2016, various Chinese governmental authorities set out several rules to legalize internet-based taxi services and to push forward the development of car-hailing platforms (see KPMG China Tax Alert (Issue 29, August 2016) and (Issue 44, November 2016) for details).
On 30 May 2018, seven government authorities jointly issued Jiao Ban Yun  No. 68 (“Circular 68”) which aims to enhance the supervision of internet-booked taxi services. The seven authorities include the Ministry of Transport, Office of the Central Cyberspace Affairs Commission, Ministry of Industry and Information Technology, Ministry of Public Security, the People’s Bank of China, SAT and State Administration for Market Regulation.
Specifically, Circular 68 sets out the following measures:
On 24 May 2018, the OECD released the first peer reviews of the Country-by-Country (CbC) reporting initiative, demonstrating strong progress on a key initiative for strengthening taxation of multinational enterprises (MNEs) worldwide.
The first annual peer review report on the implementation of the Action 13 minimum standard was released shortly after the second annual peer review was launched for the 2018-2019 period. The first annual peer review report were prepared for the 95 jurisdictions including China, which provided legislation and/or information relating to the implementation of CbC Reporting.
In line with the agreed methodology for the peer review process, China’s CbCR regime is analyzed in light of its (i) domestic legal and administrative framework, (ii) exchange of information network, and (iii) appropriate use of the instrument.
This is to avoid CbC reports being used as a substitute for detailed transfer pricing analyses of specific transactions, or as a tool for making specific adjustments based on generic formulae.
China is therefore encouraged to take appropriate steps to ensure that CbC reports will only be used for the intended purposes.
* So far, the OECD has issued seven sets of CbC guidance (see KPMG China Tax Weekly Update (Issue 8, March 2018) for details).