CHINA TAX NEWSLETTER

Transcription

1 APRIL 2015 CHINA TAX NEWSLETTER CANCELLATION OF SOME TAX-RELATED ADMINISTRATIVE CANCELLATION OF THREE APPROVAL REQUIREMENTS RELATED TO NEW JAPANESE LOCAL CORP. TAX APPLICABLE TO TAX TREATY APPROVAL REQUIREMENTS PAGE 2 ENTERPRISE INCOME TAX PAGE 3 BETWEEN CHINA AND JAPAN PAGE 4 SUPPLEMENTARY TAX REGULATIONS FOR SUPPORTING AND PROMOTING ENTREPRENEURSHIP AND EMPLOYMENT OF KEY GROUPS The Ministry of Finance, State Administration of Taxation (SAT), and Ministry of Human Resources and Social Security jointly released an announcement on 13 February 2015, outlining following supplementary regulations to the implementation of related tax policies for supporting and promoting entrepreneurship and employment of key groups: (1) The Employment/Unemployment Registration Certificate is renamed the Employment/ Entrepreneurship Certificate, and those already released remain in force. (2) The College Graduate Entrepreneur Certificate is repealed. For college graduates engaged in self-employed businesses that are eligible for the preferential tax policies, if they start their self-employed businesses during their stay in schools in the graduation year, they shall apply to a public employment service agency for the Employment/Entrepreneurship Certificate with the student certificate, or authorize the Career Service Centre of their schools to apply to the public employment service agency for the Certificate; if they start their self-employed businesses after they graduate from the schools in the graduation year, they shall apply to the public employment service agency for the Employment/Entrepreneurship Certificate. The public employment service agency shall give clear indication of Tax policies for colleague graduates engaged in self-employed businesses during the graduation year on the Employment/ Entrepreneurship Certificate. CONTENTS Supplementary Tax Regulations for Supporting and Promoting Entrepreneurship and Employment of Key Groups Adjustment to the Tax Return for Consumption Tax on Refined Oil Comprehensive Revision to the Administrative Measures on Levying and Collection of Vehicle Purchase Tax Cancellation of Some Taxrelated Administrative Approval Requirements to Simplify Taxrelated Formalities for Taxpayers Cancellation of Three Approval Requirements Related to Enterprise Income Tax and Enhancement of Follow-up Administration New Japanese Local Corporation Tax Applicable to the Tax Treaty Between China and Japan ADJUSTMENT TO THE TAX RETURN FOR CONSUMPTION TAX ON REFINED OIL Taxpayers shall use the updated tax return for declaring consumption tax of January 2015 and afterwards, i.e. Tax Return for Consumption Tax on Refined Oil. The adjustment is made primarily based on the requirements stipulated in the Announcement of the Ministry of Finance and State Administration of Taxation on Continuously Raising Consumption Tax on Refined Oil (Cai Shui [ 2015] No. 11). A column related to the applicable tax rate of refined oil is added to the main form of the Tax Return for Consumption Tax on Refined Oil as well as Appendix 3 Reporting Form of Tax Withheld.

2 2 CHINA TAX NEWSLETTER COMPREHENSIVE REVISION TO THE ADMINISTRATIVE MEASURES ON LEVYING AND COLLECTION OF VEHICLE PURCHASE TAX The SAT has implemented a comprehensive revision on the Administrative Measures on Levying and Collection of Vehicle Purchase Tax (State Administration of Taxation Order No. 33), further improving the collection and administration of vehicle purchase tax. The new circular has clear stipulations for principal clauses like legal bases, taxable scope, tax declaration, taxable value, administration of tax refund and exemption, proof of tax payment, etc. It also further clarifies concepts like locality of taxpayers, date of purchase, date of importation, date of obtaining the vehicle, vehicle imported by a taxpayer for own use, imported used cars, vehicles damaged by force majeure factors, vehicles which are in the inventory for more than three years, testing vehicles with mileage of 80,000 km and above, etc. The new administrative measures are effective as of 1 February CANCELLATION OF SOME TAX- RELATED ADMINISTRATIVE APPROVAL REQUIREMENTS TO SIMPLIFY TAX- RELATED FORMALITIES FOR TAXPAYERS Starting from 4 February 2015, some tax-related administrative approval requirements would be cancelled. On one hand, tax-related formalities for taxpayers are simplified, but on the other hand, the follow-up administration by tax authorities is enhanced. TIPS FROM BDO CHINA (1) Cancellation of the approval of tax filing method of taxpayers: Taxpayers can voluntarily choose from a variety of options for filing taxes, such as going to the tax service hall, mailing the tax returns, or filing online, etc. based on the actual production and operation requirements. (2) Cancellation of the approval of printing invoices with the entity s name: An entity is only required to fill in the form Printing of Invoices with Entity s Name. The tax authorities shall confirm the type and quantity of the invoices to be printed with the entity s name within five workdays and issue the Invoice Printing Notice to the invoice printing enterprise. (3) Cancellation of the approval of tax registration (for new entity, information change, verification, and replacement): Staff at service counters only verify the application materials submitted by a taxpayer per formality requirements. After related materials are collected, the staff will complete the tax registration immediately, assign a tax identification number to the taxpayer, and issue the tax registration certificate accordingly. (4) Cancellation of the approval of withholding tax registration: The tax authorities shall directly complete the withholding agent registration formality when handling tax registration, filing, and other tax-related matters, and supervise and inspect the withholding agent to ensure that the withholding agent has declared and withheld taxes truthfully per regulatory requirements.

3 CHINA TAX NEWSLETTER 3 CANCELLATION OF THREE APPROVAL REQUIREMENTS RELATED TO ENTERPRISE INCOME TAX AND ENHANCEMENT OF FOLLOW-UP ADMINISTRATION (1) The filing formalities for small low-profit enterprises for eligibility to preferential enterprise income tax are further simplified. The enterprises can complete the filing by filling in the blanks for 104 Number of employees and 105 Total assets (10K RMB) in the Basic Information (Form A000000) of the Annual Enterprise Income Tax Return of the People s Republic of China (Type A, edition 2014). No additional filing is required. (2) Follow-up administrative measures have been put forward after the approval of the filing of list of tier-2 or lower branches under enterprises whose revenues are fully turned over to the central government is cancelled. After the approval is cancelled, if there is change in the list of tier-2 or lower branches under enterprises whose revenues are fully turned over to the central government, the enterprises shall submit related materials to their competent tax authorities as per requirements under different circumstance. (3) Follow-up administrative measures have been put forward after the approval of the organizational structure change of enterprises paying tax on a consolidated basis is cancelled. After the approval is cancelled, the head office as well as related tier-2 branches shall report to the competent tax authorities about the organizational structure change within 30 days after the change takes place. Small low-profit enterprises with tax levied by audit of accounts can apply the simplified filing formality in the final settlement of enterprise income tax of 2014 and afterwards. The follow-up administrative measures for the repeal of the approval of filing of list of tier-2 or lower branches under enterprises whose revenues are fully turned over to the central government and the approval of the organizational structure change of enterprises paying tax on a consolidated basis is effective as of 1 January 2015.

4 4 CHINA TAX NEWSLETTER NEW JAPANESE LOCAL CORPORATION TAX APPLICABLE TO THE TAX TREATY BETWEEN CHINA AND JAPAN A fter negotiation, the tax authorities of China and Japan have agreed that the local corporation tax imposed as of 1 October 2014 in Japan would be applicable to the Agreement between the Government of the People s Republic of China and the Government of Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income. TIPS FROM BDO CHINA The local corporation tax is substantially equivalent to the corporation tax in Japan as mentioned in Article 2 of the tax treaty between China and Japan. Therefore, Chinese residents are eligible to credit the local corporation tax paid in Japan in the same manner as that stipulated in Article 23 of the tax treaty for corporation tax.

5 The Newsletter is published for the clients of BDO China Shu Lun Pan Certified Public Accountants LLP and Lixin Certified Tax Agents Co., Ltd. The contents are for reference only which should be kept confidential. Although we try to ensure the accuracy, please note that the content is just the extract of related documents with our brief unbiased comments, thus detailed information should be referred to the full regulation mentioned when in practice. Readers are advised to consult tax advisors before acting on any information in this newsletter. For more information or advice on the above subjects or other tax issues, please contact: JESSE WANG Tel: / JASON HU Tel: ROBERT PEDERSEN Partner, International Tax Services Tel: To ensure compliance with US Treasury Department regulations, we wish to inform you that any tax advice that may be contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the US Internal Revenue Code or applicable state or local tax law provisions or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein. BDO International is a worldwide network of public accounting firms, called BDO Member Firms. Each BDO Member Firm is an independent legal entity in its own country. The network is coordinated by BDO Global Coordination B.V., incorporated in The Netherlands, with its statutory seat in Eindhoven (trade register registration number ) and with an office at Boulevard de la Woluwe 60, 1200 Brussels, Belgium, where the International Executive Office is located.