China’s Belt and Road Initiative (BRI) has established a mechanism to observe the tax laws of countries belonging to BRI. The BRI or the One Belt, One Road (OBOR) project aims to facilitate trade and investments from East Asia to Europe. To create a win-win tax environment, governments of participating countries need the support of their various divisions and branches, as well as those of the people. On China’s side, the tax authorities are actively making sure that cross-border investments are more efficient, reliable, and most importantly, effective. Thus, China’s State Taxation Administration (STA) continues to implement the digitalization of tax services to give more value to the taxpayers’ money.
See our previous article on E-fapiao and the Digitalization of Tax Services in China
In its 13th Five-Year plan for the periods covering 2016-2020, STA revealed that the mechanism has achieved the following goals among others:
- Improving tax certainty, reducing tax burdens, and avoiding double taxation for cross-border (international) taxpayers;
- Resolving cross-border tax disputes through the consultation mechanisms in treaties;
- Engaging in 497 bilateral consultations with tax authorities of other countries and regions through the State Taxation Administration (STA); and
- Avoiding double taxation of RMB 14.5 billion (USD 2.18 billion) for cross-border enterprises.
Through its tax bureau, China aims to build a better tax environment in the Belt and Road regions. It has put into place several functions within the country and abroad to prosper simultaneously. Among these is the global tax mechanism called BRITACʘM.
Belt and Road Initiative Tax Administration Cooperation Mechanism (BRITACʘM)
BRITACʘM focuses on tax administration cooperation among jurisdictions that subscribe to the Belt and Road Initiative. It is a non-profit organization with a mechanism to respect the sovereignty and laws of all participants. BRITACʘM aims to facilitate trade and investment and foster the economic growth of all participants. Moreover, it ensures participating regions can achieve inclusive and sustainable development among others. It also sets out to contribute to building a growth-friendly tax environment for all member countries by:
- Following the rule of law;
- Raising tax certainties;
- Expediting tax dispute resolution;
- Improving taxpayer service; and
- Enhancing tax capacity building.
Belt and Road members and their jurisdictions can achieve these goals through international cooperation and best practices. Moreover, the United Nations’ 2030 Agenda for Sustainable Development is also among BRITACʘM’s many goals to realize and fulfill. By acting in collaborative partnership, all parties must face the global challenge of international prosperity, thus, ending global (extreme) poverty.
Participants of the Belt and Road global tax cooperation initiative
BRITACʘM now has 36 members and 28 observing parties. As a tax authority in China’s cross-border economic activities, it has treaties, memoranda of understanding, journals, etc. for its participating member countries. In its newly launched website, BRITACʘM’s COVID-19 page consists of valuable practices and policy responses to the unprecedented COVID-19 tax scene from the participating members. Some countries belonging to BRITACʘM include China, Ethiopia, United Arab Emirates, Tajikistan, Pakistan, Macao, Hong Kong China, and more. These countries have the same goal to:
- further strengthen tax cooperation;
- focus on quality in the joint efforts to build the B&R; and
- build a community with a shared future for humankind.
Among BRITACʘM’s achievements include the introduction of many preferential policies to soothe and stabilize foreign investment (guide foreign enterprises to reinvest their profits in production and businesses).
Tax services
Foreign-invested companies have BRITACʘM’s regulations to assist them in getting through the compliance systems in China. Like in any country, however, taxpayers in China prefer avoiding tax disputes to escalate to higher stages. Therefore, getting your tax computations right at the first filing is essential. However, during the limited stages of available tax appeals, it is very important to have competent tax professionals to guide you through every stage of your tax filing. Our Tax and Accountancy practice offers cost-effective integrated services. These include individual and corporate tax planning, outsourced payroll management, audit, and limited review. With an international, multilingual team, S.J. Grand’s accountants in Asia can take care of all your tax and accountancy needs.
Conclusion
By taking part in various global cooperative efforts, China is aiming to make a better tax environment for both Chinese and foreign companies alike. However, organizations and mechanisms organized for this cause can only be successful with the help of the people, in this case, the taxpayers.
Business owners with tax obligations in and out of China can also achieve a more convenient and reliable tax environment with the help of local tax advisors. Despite the COVID-19 pandemic, it is beneficial to all concerned if we pool together our respective best practices and experiences to help fight the pandemic and its related struggles.
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