SAT

China issues new measures for the General Anti-Avoidance Rules

The State Administration of Taxation issued on December 2, 2014 the Administrative Measures for the General Anti-Avoidance Rules (Trial Implementation) and the Measures became effective on February 1, 2015.  The Measures further clarify the scope of application and the procedures of GAAR. The GAAR represent procedures to fight against tax evasion, tax avoidance and abuse of trade treaties. Henceforth, the State Administration of Taxation (SAT) intends to carry out investigations on corporate transactions without commercial purpose and economic substance.

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.

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 REVAMPING INCENTIVES TO FOSTER SMALL PROFIT BUSINESSES

In China, small businesses hold the majority among the total number of enterprises in China. Considering the small businesses as one of the driving factors for the Chinese economy, the PRC government has decided to offer them some preferential income tax rates and VAT exemption which is subject to a certain qualifications as discussed in this newsletter. This is expected to ease off their tax burden to a certain extent allowing them to save more cost, thus, make more margin.

GUIDANCE ON WHEN STAFF SECONDMENT CREATES TAXABLE PRESENCE IN CHINA

Along with the speedy development of China’s economy and globalization, the need for skilled resources in China is escalating. This has led to an increase in the mobility of human resources to China. Increasingly, multinational companies (“MNCs”) with set up in China are looking for talents within their existing work force from their operations around the world and dispatch them on temporary arrangements to China to assume key technical, management or other positions with the Chinese entity.

Beijing to join Shanghai in VAT Pilot Scheme

Chinese state media is citing unnamed sources in the Beijing office of the State Administration of Taxation (SAT) and Beijing Local Taxation Bureau reporting Beijing will be the next region approved to join the VAT reform pilot program that is now underway in Shanghai.

VAT treatment for sale of self-used fixed assets

--Simplified method to be used to calculate VAT payment when selling self-used fixed assets under certain circumstances--

Beijing kicks off VAT reform implementation under Pilot Project

 Beginning in January 2012, Shanghai kicked off a pilot project in transport and certain modern service sectors. Following in Shanghai's  footsteps, Beijing has recently taken a step to initiate VAT reform by submitting its application to the MOF and SAT to start a similar pilot project in the transportation industry and certain modern service industries.

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