China Business News

S.J.Grand offers quality research, case studies and essential updates on the latest China tax and business issues through our news feed, periodic newsletters and our online resource library.

Please feel free to browse, to search using the tags below or contact an S.J. Grand office if you would like to know more about a particular topic that interests you.

Ratification of the new France-China tax treaty for pensions

The final stages of the ratification of the new France China double tax treaty were completed on November 28, 2014. The treaty will become effective on January 1, 2015. This agreement replaces the tax treaty signed in 1984 and modifies the tax treatment of pensions.

China – Netherlands New Double Taxation Treaty

The new income tax treaty and protocol signed by China and the Netherlands on May 31, 2013, entered into force on August 31, 2014.The agreements replace the former treaty of 1987. The New Treaty and Protocol will apply to income derived on or after 1 January 2015 for the two countries. It represents one of the most favorable double tax treaties with China and it will probably have a significant impact on investments between both countries.

Key highlights:

Shanghai-HK Stock Connect to Launch on November 17

On 17 November, the Shanghai-Hong Kong Connect is set to officially launch. For the first time, the Stock Exchange of Hong Kong (SEHK) and the Shanghai Stock Exchange (SSE) are linked, that allows investors in either exchange to trade on both stock markets. The scheme will grant global investors freer access to mainland shares.

Key points:

SAT Fights Tax Avoidance with Investigation

Recently, the State Administration of Taxation (SAT) accelerated its commitment to fight tax avoidance in China. The tax authority decided to carry out investigation on Chinese subsidiaries sending money offshore via service fee or royalties to related entities. Indeed, the SAT issued the Circular of the General Office of State Administration of Taxation on Carrying out Anti-tax Avoidance Investigation on Large Sum External Payments on July 30, 2014 (“Circular No. 14-146”).

Circular 75: China introduces new policy for accelerated depreciation of fixed assets

In pursuant to the announcement made on September 24, 2014 introducing new policy for accelerated fixed asset depreciation method, the Ministry of Finance and the State Administration of Taxation (SAT) jointly released a circular, Caishui [2014] No. 75 (Circular 75). The circular sets out guidance for the new policy. The circular will become retroactively effective as of Jan 1, 2014.

TAX INCENTIVES FOR ADVANCED TECHNOLOGY SERVICE COMPANIES

In a circular, jointly released by the Ministry of Finance (MoF), the State Administration of Taxation (SAT) and three other authorities, provides for better company income tax (CIT) policies offering further relaxation in the tax incentives to the qualified advanced technology services companies. The circular is effective from Jan 01, 2014 to Dec 31, 2018.

Key points:

Hong Kong: Taxation of director’s fees

The taxation of director’s fee for a company incorporated offshore is a delicate issue, and it is vital to know under what jurisdiction directors are subject to tax.

In a recent published case (Case No. D21/13), the Hong Kong Board of Review had to decide whether fees earned by a director of a company incorporated offshore but listed in Hong Kong were subject to salaries tax in Hong Kong.

New regulations to boost corporate transparency in China

Whether it is a market researcher trying to identify business trends in China, a reporter compiling profiles, or a company overseas that wants to conduct due diligence for future investment in China, access to basic information is vital. However, the practice of minimum public reporting in Chinahas limited the access to public information which has made the business environment ripe for bureaucracy and corruption. In order to combat the issue, over the past few years, the PRC government has taken many considerable steps to improve business environment in China.

Regulations of China (Shanghai) Pilot Free Trade Zone released

It has been almost one year now since the Free Trade Zone (FTZ) has been launched.  During this time, a number of regulations have been issued by various authorities, such as the Ministry of Finance, the General Administration of Customs, the Ministry of Transport, People’s Bank of China, etc.

China extends corporate income tax incentives for western region

Three years ago, China’s authorities- Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation issued circular 58 offering tax incentives to companies located in western part of China for its regional development. The circular provided for an extension of the tax incentives for China's western region from 1 January 2011 to 31 December 2020.

China raises a resource tax on crude oil and natural gas

According to the Ministry of Finance (MOF) and the State Administration of Taxation (SAT), China will raise a resource tax on crude oil and natural gas, to take effect on 1st December, 2014.

China taking tax measures to boost small profit businesses

Scope of VAT, Business Tax exemption expands for low-profit businesses

In an effort to further boost the growth of low-profit enterprises and individual enterprises in China, the State Council is working on several tax and administrative measures for small businesses. The measures are expected to offer some concessionary tax treatment, certain tax exemptions and waiver of registration fee in certain cases.

Transfer Pricing: SAT’s call to order

The State Administration of Taxation has released its “Announcement of the State Administration of Taxation and Monitoring and Administration of Special Tax Adjustment [2014] No. 54” on August 29th. The announcement aims at further reminding taxpayers about Transfer Pricing rules as well as well-encouraging new self-adjustments.

China loosens control on outbound securities

In a circular published in May, the State Administration of Foreign Exchange (SAFE) further continued its move towards less regulation and more supervision. The Foreign Exchange Administration Rules on Cross-border Security (Hui Fa [2014] No. 29) simplifies the use of outbound securities. The new rules have taken effect last June. Three categories have been set up by SAFE to distinguish the different kinds of securities, depending on the localization of its obligor, creditor and provider.

Outbound and roundtrip investments: New regulations from SAFE

  Changes introduced before/ after
Authorized scope of SPV* Financing
  Financing and investing
Beijing - Shanghai - Shenzhen - Hong Kong - Paris

Copyright © 2009-2017 S.J.Grand. All rights reserved.