China Tax Center China Tax & Investment Express

Transcription

1 Issue No Nov 2017 China Tax Center China Tax & Investment Express (CTIE)* brings you the latest tax and business announcements on a weekly basis. CTIE provides a synopsis of each announcement including a link that leads you to the full content of the announcement (in Chinese). Please feel free to contact your EY client service professionals for further assistance if you find the announcements have an impact on your business operations. CTIE does not replace our China Tax & Investment News* which will continue to be prepared and distributed to provide more indepth analyses of tax and business developments in China. *If you wish to access the previous issues of CTIE and China Tax & Investment News, please contact us. Tax circulars Notice regarding expanding the preferential Corporate Income Tax policies related to Technologically Advanced Service Companies on a nationwide basis (Caishui [2017] No. 79) Synopsis While enhancing inbound and outbound strategies, the Chinese economy has entered into an era of a new normal, i.e. a continuous challenge in attracting and utilizing foreign capital. In order to attract foreign capital and facilitate foreign investments in China, the Chinese central government released Guofa [2017] No. 39 ( Circular 39, i.e., Notice regarding certain measures on promoting foreign investments) in August 2017, providing guidelines on market access for foreign investments and proposing certain financial and tax incentives for foreign investors. Among these, it was mentioned that China will expand the preferential Corporate Income Tax (CIT) policies for Technologically Advanced Service Companies (TASCs) on a nationwide basis. 1

2 In response, the Ministry of Finance (MOF), State Administration of Taxation (SAT), Ministry of Commerce (MOFCOM), Ministry of Science and Technology (MOST) and National Development and Reform Commission (NDRC) jointly released circular Caishui [2017] No. 79 (Circular 79) on 2 November 2017 to roll out the CIT preferential policies for TASCs currently implemented in 31 model cities 1 and 15 pilot areas 2 nationwide. It is worth noting that Circular 79 took retroactive effect from 1 January Preferential CIT policies Effective from 1 January 2017, recognized TASCs in China shall be entitled to the following preferential CIT policies: Reduced CIT rate of 15% The annual deduction limit for employee education expenses is up to 8% of total salaries and wages (normally 2.5%). The part of employee education expenses exceeding the limit can be carried forward to future years. Qualifying criteria for TASCs All of the following criteria should be met for qualifying TASCs: Being a legal entity registered within the territory of China (excluding the Hong Kong Special Administrative Region (SAR), Macao SAR and Taiwan) Engaging in one or more technologically advanced services as prescribed in the Scope of Recognition of Technologically Advanced Services (i.e., attachment of Circular 79, hereinafter referred to as Recognition Scope ), adopting advanced technologies or possessing strong research and development capacities With more than 50% of its total headcount graduated with an associate degree or above With more than 50% of its annual total income derived from undertaking services as prescribed in the Recognition Scope With no less than 35% of its annual total income derived from offshore outsourcing services 3 Recognition and Administration of TASCs Circular 79 emphasizes that foreign investment enterprises shall enjoy the same treatments accorded to domestic enterprises in terms of qualification recognition. We compare Circular 79 with the prevailing regulations for TASCs, i.e., Caishui [2014] No. 59 ( Circular 59, i.e., Notice regarding the improvement of CIT policies for TASCs) and list the key information as follows (Please refer to CTIE for details of Circular 59): Items Circular 79 Circular 59 In-charge authorities Provincial-level technology departments together with commerce departments, finance bureaus, tax bureaus and commissions of development and reform (hereinafter referred to as Provincial-level Recognition Authorities ) shall stipulate detailed measures for recognition and administration of TASCs. The above-mentioned detailed measures shall be filed to the MOST, MOFCOM, MOF, SAT and NDRC for record purposes. Local technology departments together with commerce departments, finance bureaus, tax bureaus and municipal commissions of development and reform of the model cities (hereinafter referred to as Local Recognition Authorities ) shall stipulate the detailed measures for recognition and administration of TASCs. The above-mentioned measures shall be filed to their upper authorities at the provincial level, as well as the MOST, MOFCOM, MOF, SAT and NDRC for record purposes. 2

3 Items Circular 79 Circular 59 TASCs recognition procedures A qualifying TASC shall lodge an application with the technology department at the provincial level. A qualifying TASC shall lodge an application with the local technology department. Provincial-level Recognition Authorities shall perform joint review and recognition and file the lists of recognized TASCs for record purposes via the National TASCs Business Management Platform. Qualifying TASCs shall submit the basic information and data on time to the MOFCOM via the Information System for Managing and Supervising Statistics of the Service Trade Sector (Service Outsourcing Information Management Application). Local Recognition Authorities shall perform joint review and recognition and file the lists of recognized TASCs to the upper authorities at the provincial level, as well as the MOST, MOFCOM, MOF, SAT and NDRC timely for record purposes. Follow-up administration A recognized TASC shall file its documents for recognition with its supervising tax bureau to enjoy the abovementioned CIT treatments. Any changes of the TASC that influence its TASC status should be reported to the supervising tax bureau within 15 days. Where the TASC is no longer qualified for the TASC status due to the changes, it shall fulfill its obligation to pay CIT according to prevailing CIT regulations. Where the supervising tax bureau finds a TASC unqualified, the supervising tax bureau shall require the Provincial-level Recognition Authorities to re-assess the qualification of the TASC. The TASC status shall be revoked if the TASC is regarded as unqualified. A recognized TASC shall file its documents for recognition with its supervising tax bureau to enjoy the abovementioned preferential CIT treatments. Any changes of the TASC that influence its TASC status should be reported to supervising the tax bureau within 15 days. Where the TASC is no longer qualified for the TASC status due to the changes, it shall fulfill its obligation to pay CIT according to prevailing CIT regulations. Where the supervising tax bureau finds a TASC unqualified, the TASC shall stop enjoying preferential CIT policies. The supervising tax bureau shall require the Local Recognition Authorities to re-assess the qualification of the TASC. Effectiveness Circular 79 took retroactive effect on 1 January Provincial-level Recognition Authorities shall stipulate and promulgate the TASC Recognition and Administration Measures (hereinafter referred to as Administrative Measures ) prior to 31 December 2017 and start the recognition work according to the Administrative Measures. It should be noted that those TASCs which have already been recognized in 31 model cities shall continue to enjoy the preferential CIT policies, while from 1 January 2018, the TASC recognition in model cities shall also be carried out in accordance with the Administrative Measures. 3

4 Our observations Comparison between Circular 59 and Circular 79 Compared with Circular 59, the preferential CIT policies and certain criteria (such as the Recognition Scope, headcount requirement and annual income requirement) remain unchanged. However, the criteria for qualifying TASCs has been changed in terms of registration location. Circular 59 stipulates that a qualifying TASC shall be a legal entity registered and operating in the model cities. With the roll out of preferential CIT policies for TASCs on a nationwide basis, such criteria has been changed to a qualifying TASC shall be a legal entity registered within the territory of China (excluding the Hong Kong SAR, Macao SAR and Taiwan). In addition, the supervising authorities in charge of recognition and administration of TASCs have been changed from the locallevel authorities to the provincial-level authorities. Preferential Value-added Tax (VAT) policies Apart from the CIT preferential policies, as prescribed in Attachment IV of Caishui [2016] No. 36 ( Circular 36, i.e., Notice regarding the final stage of the VAT pilot arrangements), revenue derived by domestic entities and individuals from offshore outsourcing services shall be subject to zero VAT rate. On the other hand, for taxpayers engaging in offshore outsourcing services that are eligible for zero VAT rate, but choosing to apply the simplified VAT calculation method or declaring the renunciation of applying zero VAT rate, the relevant revenue derived shall be exempt from VAT (for more details, please refer to SAT Public Notice [2016] No. 29, PN 29, i.e., Public Notice regarding the Administrative Measures for VAT Exemption on Cross-border Taxable Activities under VAT Pilot Arrangements (Trial) ). (Please refer to Indirect Tax Alerts no and no , CTIE and CTIE for details of Circular 36 and PN 29.) Service outsourcing developments in China To promote the development and enhance the competitiveness of enterprises in high-tech industries in China, the Chinese central government initiated the pilot preferential tax policies for TASCs in Suzhou Industrial Park in In the following years, the pilot areas have been gradually expanded to include 31 model cities. Circular 79 now rolls out the policies for TASCs on a nationwide basis. We summarize below the developments of CIT policies for TASCs and the scope of areas eligible for such treatments in China for your reference: In 2006, the Chinese central government initiated the preferential tax policies for TASCs in Suzhou Industrial Park on a pilot basis, meaning that the recognized TASCs shall be entitled to reduced CIT rate of 15% and deduction of employee education expenses up to 2.5% of total salaries and wages (and please note that the rate was raised to 8% from year 2007) so, these matters are hereinafter referred to as preferential CIT policies ; In 2009, the pilot areas were expanded to cover 20 model cities including Beijing, Tianjin, Shanghai, Chongqing, Dalian, Shenzhen, Guangzhou, Wuhan, Harbin, Chengdu, Nanjing, Xi an, Jinan, Hangzhou, Hefei, Nanchang, Changsha, Daqing, Suzhou and Wuxi; In 2010, Xiamen was included into the scope of model cities; In 2016, the number of model cities has been expanded from 21 to 31, with the newly added 10 cities of Shenyang, Changchun, Nantong, Zhenjiang, Ningbo, Fuzhou (including Pingtan Comprehensive Pilot Zone), Qingdao, Zhengzhou, Nanning and Urumchi. In addition, the Chinese central government decided to launch a pilot innovative development of service trade in 15 pilot areas from 1 January 2016 to 31 December 2017, and recognized TASCs located in these 15 pilot areas shall apply to the preferential CIT policies; In 2017, the preferential CIT policies for TASCs have been rolled out on a nationwide basis. It is obvious that the Chinese government has determined to further attract foreign capital and to encourage technological innovation to enhance economic competitiveness. Circular 79 brings good news to businesses engaging in or intending to carry out technologically advanced services in China. The relevant businesses are encouraged to study Circular 79 carefully to explore the possibility of receiving various tax benefits model cities include: Beijing, Tianjin, Shanghai, Chongqing, Dalian, Shenzhen, Guangzhou, Wuhan, Harbin, Chengdu, Nanjing, Xi an, Jinan, Hangzhou, Hefei, Nanchang, Changsha, Daqing, Suzhou, Wuxi, Xiamen, Shenyang, Changchun, Nantong, Zhenjiang, Ningbo, Fuzhou (including Pingtan Comprehensive Pilot Zone), Qingdao, Zhengzhou, Nanning and Urumchi. 4

5 2 15 pilot areas refer to areas for innovative development of service trade, including Tianjin, Shanghai, Hainan, Shenzhen, Hangzhou, Wuhan, Guangzhou, Chengdu, Suzhou, Weihai and Harbin New Area, Jiangbei New Area, Liangjiang New Area, Guian New Area, Xixian New Area. 3 Revenue derived from offshore outsourcing services refers to revenue derived by a TASC or its direct subcontractor under an outsourcing service agreement entered by the TASC and an overseas entity for provision of Information Technology Outsourcing (ITO), Technological Business Process Outsourcing (BPO) and Technological Knowledge Process Outsourcing (KPO) services as prescribed in the Recognition Scope. You may click this link to access the full content of Circular 79: You may click this link to access the full content of Circular 59: You may click this link to access the full content of Circular 36: You may click this link to access the full content of PN 29: Notice regarding the Administrative Procedural Guidelines on Information Verification related to VAT Filing (Trial) (Shuizongfa [2017] No. 124) Synopsis To reinforce and regulate the administration of information verification on VAT filings, as well as improve the quality of VAT filing, the SAT released a set of Trial Administrative Procedural Guidelines on Information Verification related to VAT Filing (hereinafter referred to as Trial Guidelines ) via Shuizongfa [2017] No. 124 on 30 October Key features of the Trial Guidelines are as follows: Scope of the information verification According to the Trial Guidelines, the tax authorities shall make use of the relevant information to cross-check the following information and take appropriate actions based on the results: Information shown on VAT returns and the relevant schedules Information shown on VAT invoices issued by general VAT taxpayers and small-scale VAT taxpayers Information shown on VAT invoices obtained by general VAT taxpayers for input VAT credits Information related to tax payments by taxpayers Information related to records filed for eligibility of preferential VAT treatments Other information as required Methodologies for the information verification Verification of VAT returns* The logical relations within VAT returns and the relevant schedules should be checked to verify whether the figures are filled in accordance with the rules as prescribed by the SAT. 5

6 Verification of invoices of general VAT taxpayers* Verification related to output VAT Total revenue and VAT amount of VAT invoices issued by a taxpayer in the current period (except for those issued for revenue not subject to VAT) should be less than or equal to the total revenue and VAT amount filed in the current period. In case a taxpayer has reported VAT-exempt revenue or revenue eligible for the Same Time Levy and Rebate policy, the tax authority shall check whether a proper record filing is completed, except for those exempt from record filing procedure. Verification related to input VAT The total tax amounts shown on the import VAT payment demand notes ( 海关进口增值税专用缴款书 )/withholding tax payment invoices ( 代扣代缴税收缴款凭证 )/certificates for export goods transmitted for domestic sales ( 出口货物转内销证明 ) etc., should be greater than or equal to the respective amounts of input VAT credit reported on the VAT returns of the current period. Input VAT amount transferred out as indicated on red-letter invoices should be equal to the amount of input VAT transferred out supported by red-letter invoices on the VAT return of the current period. The amount of input VAT transferred out as shown on the VAT return should not be less than zero. Verification related to reduced amount of tax payable The reduced amount of tax payable reported in the current period should be less than or equal to the applicable reduced amount as prescribed in the prevailing rules. Verification related to prepaid VAT amount The prepaid VAT amount incurred in the current period as reported on the VAT return should be less than or equal to the actual prepaid VAT amount. Special verification methodologies Head office and its branches which are under the VAT consolidation filing may be exempt from verification between their invoices and VAT returns. Taxpayers that file their VAT returns on a quarterly basis should be subject to verification on their data generated on a quarterly basis. Verification of invoices of small-scale VAT taxpayers (similar to that of general VAT taxpayers)* Methodologies for verification between returns and tax payments: the amount of tax payable reported in the current period should be less than or equal to the actual tax payment in the current period. Other methodologies The SAT may set out methodologies on specific items of the VAT returns based on the actual needs of VAT risk management. The state tax authorities at the provincial level may set out an appropriate range of positive/negative differences on specific items for verification purposes. Supervising state tax authorities may set out a dynamic white list of taxpayers which may be subject to special mythologies of verification due to their tax collection methods or invoice issuance statuses. Methodologies marked with * are basic methodologies to be conducted by the tax authorities. The others are not mandatory. Tax authorities at the provincial level may adopt other methodologies based on their actual practices. 6

7 Further actions to be taken by the tax authorities based on the results of the verification The information verification processes may be conducted by the tax authorities as an interim and post event supervision subject to the decision by the tax authorities at the provincial level. Upon verification, the following actions shall be taken by the tax authorities based on the verification results: If the information verified shows a consistent result, the supervising tax authority shall unlock the tax control device of the taxpayer. If the information verified shows an inconsistent result, the supervising tax authority shall notify the taxpayer and take the following actions: The tax authority shall notify the department which is in charge of handling inconsistent results and shall not unlock the tax control device of the taxpayer. However, if the inconsistency comes from unfinished record filing procedures for certain qualifications of the taxpayer, the tax authority shall unlock the tax control device. Upon verification, if the department in charge of handling inconsistent results cannot rectify the situation at hand, this case shall be further followed up by the tax resource department. If the tax resource department confirms the inconsistent result can be relieved, the tax authority shall unlock the tax control device of the taxpayer; however, if tax violations such as false issuance of tax invoices are involved, such cases shall be forwarded to the tax audit department for further handling. Tax audits may be carried out by the tax audit department if needed. The time frame for handling any inconsistent results shall be determined by the supervising tax authorities according to the practice. In case of any emergency within the database (which may interfere with the daily tax filing procedures), the tax authorities at the provincial level may temporarily suspend verification processes. The Trial Guidelines shall become effective on 1 March 2018 and replace a series of circulars in this regard. Please refer to Trial Guidelines for the detailed list of the circulars to be revoked. Our observations It is important to know that under this new rule, the tax authorities can lock the tax control device of a taxpayer if the inconsistent results are identified. Once it is locked, the relevant taxpayer will not be able to issue VAT invoices until their tax control device is unlocked. This will definitely hinder such taxpayers normal business operations. Moreover, as the Trial Guidelines have not defined a specific time frame for tax authorities to handle the inconsistent results, it may not be unreasonable to imagine that the process will take a considerable length of time once a tax audit is triggered. In this respect, taxpayers should always be cautious and ensure the consistency of their data submitted and compliance in tax-related matters. If in doubt, consultations from tax professionals are always recommended. You can click this link to access the full content of the Trial Guidelines: Notice regarding the public opinion consultation on the Law of the People s Republic of China (PRC) on Tonnage Tax (Discussion Draft) Synopsis On 18 October 2016, a Discussion Draft on the Law of the PRC on Tonnage Tax (hereinafter referred to as the First Draft ) was announced on the official website of the MOF for public opinion consultation. (Please refer to CTIE for details of the First Draft.) 7

8 Upon consultation of public opinions, the MOF and General Administration of Customs (GAC) submitted the same to the State Council for approval. The Legal Affairs Office of the State Council, together with the MOF and GAC updated the First Draft after consulting the relevant central government authorities, people s governments at the provincial level and social organizations. Upon approval from the State Council, the new draft of Law of the PRC on Tonnage Tax (hereinafter referred to as the Second Draft ) was announced on the official website of the National People s Congress (NPC) on 7 November 2017 to consult public opinions. Key changes made in Second Draft include: According to the Second Draft, any adjustment on the table of Tonnage Tax Rates has to be brought up by the State Council and filed to the Standing Committee of the NPC for approval instead of solely decided by the State Council as prescribed in the First Draft. Submission of electronic data of Tonnage Tax license is added as an alteration in addition to manual submission of Tonnage Tax license for the entry/exit formalities of taxable vessels. In the First Draft, vessels that are temporarily berthed due to cleaning of cabins, filling-up fuel/water, sickness of crew members without loading/discharging goods or passengers are exempt from Tonnage Tax. This provision is removed in the Second Draft. According to the Second Draft, if the Tonnage Tax is overpaid, within three years (instead of one year as prescribed in the First Draft), taxpayer may apply to the customs offices in writing for refund of overpaid tax plus interest calculated based on the rate of demand deposit of the same period. Upon receiving the application, the customs offices should verify and notify the taxable vessels to proceed with the tax refund procedure within 30 days. The detailed definition of yacht is removed in the Second Draft, however, the term yacht is still included in the table of Tonnage Tax rates. As in the First Draft, the Second Draft contains 21 articles which cover the taxable items of Tonnage Tax, plus the applicable tax rates as well as relevant tax administrative measures. In general, the structure and main contents of the Second Draft are still consistent with those of the prevailing Provisional Regulations of the PRC on Tonnage Tax (hereinafter referred to as the Provisional Regulations ) which became effective from 1 January (Please refer to CTIE for details of the Provisional Regulations.) Concerned enterprises or individuals are encouraged to express opinions on or before 6 December 2017 by sending mails or logging onto You can click this link to access the full content of the Second Draft: You can click this link to access the full content of the First Draft: You can click this link to access the full content of the Provisional Regulations: 8

9 Business circular Notice regarding issues related to foreign exchange administration on finance lease business (Huifa [2017] No. 21) Synopsis According to the Administrative Regulations on Foreign Exchange and Shangzihan [2017] No. 515 ( Circular 515, i.e., Notice regarding copying and rolling out the third batch of reform arrangements implemented in the Pilot Free Trade Zones nationwide), the State Administration of Foreign Exchange released Huifa [2017] No. 21 ( Circular 21 ) on 12 October 2017 to expand the pilot foreign exchange administrative rules on finance lease business in the Pilot Free Trade Zones nationwide. (Please refer to CTIE for details of Circular 515.) According to Circular 21, finance lease companies ( 金融租赁公司 ) 4, foreign investment finance lease companies ( 外商投资租赁公司 ) 5 and domestic funded finance lease companies ( 中资融资租赁公司 ) 6 as lessors are allowed to charge their rental income in foreign currencies provided that 50% or above of the capital used to acquire the leased assets are loans/debts in foreign currencies from domestic or overseas. For a qualifying finance lease, a lessee may provide the following documents to commercial banks to purchase/remit foreign currencies for the rental: Rental demand notes issued by the lessor indicating that the rental should be paid in foreign currencies. Documents to substantiate that the criteria of 50% or above of the capital used to acquire the leased assets are loans/debts in foreign currencies from domestic or overseas are met. Other supporting documents required by the commercial banks. The rental in foreign currencies can be remitted to the foreign currency bank account of the lessor. The amount of foreign currencies that exceeds the amount of debt/loan repayment can be directly settled into RMB. Circular 21 became effective on its promulgation date, i.e., 12 October In case of any conflicts between the stipulations of Circular 21 and that of any previously released circulars, Circular 21 shall prevail. 4 Finance lease companies ( 金融租赁公司 ) refer to those that are approved to be established by the China Banking Regulatory Commission. 5 Foreign investment finance lease companies ( 外商投资租赁公司 ) refer to those that are approved to be established by the MOFCOM. 6 Domestic funded finance lease companies ( 中资融资租赁公司 ) refer to those that are approved to engage in finance leasing by the MOFCOM and SAT. You can click this link to access the full content of Circular 21: You can click this link to access the full content of Circular 515: 9

10 Other business and customs related circulars recently announced by central government authorities: Anti-competition Law of the PRC (Revised in 2017) (Chairman Order [2017] No. 77) Decision on the amendments to 11 laws including the "Accounting Law of the PRC" (Chairman Order [2017] No. 81) Notice regarding the import volume, application qualification and application procedures of import quotas for crude oil imported by non-state-operated trading companies in 2018 (MOFCOM PN [2017] No. 76) Public notice regarding the implementation of the customs clearance facilitation measures on tax collection for wine transported to the Mainland China via Hong Kong (GAC PN [2017] No. 55) 10

11 Contact us For more information, please contact your usual EY contact or one of the following of EY s China tax leaders. Office Tax Leaders Martin Ngai (Beijing) martin.ngai@cn.ey.com Fisher Tian (Tianjin) fisher.tian@cn.ey.com Samuel Yan (Dalian/Shenyang) samuel.yan@cn.ey.com Lucy Wang (Qingdao) lucy-c.wang@cn.ey.com Joanne Su (Xi an) joanne.su@cn.ey.com Vickie Tan (Shanghai) vickie.tan@cn.ey.com Raymond Zhu (Wuhan) raymond.zhu@cn.ey.com Audrie Xia (Suzhou) audrie.xia@cn.ey.com Andrew Chen (Nanjing) andrew-jp.chen@cn.ey.com Patricia Xia (Hangzhou) patricia.xia@cn.ey.com Chuan Shi (Chengdu) chuan.shi@cn.ey.com Clement Yuen (Shenzhen) clement.yuen@cn.ey.com Rio Chan (Guangzhou/Changsha) rio.chan@cn.ey.com Jean Li (Xiamen) jean-n.li@cn.ey.com David Chan (Hong Kong) david.chan@hk.ey.com Heidi Liu (Taipei) heidi.liu@tw.ey.com Service Line Tax Leaders Andrew Choy (International Tax) andrew.choy@cn.ey.com Paul Wen (People Advisory Services) paul.wen@hk.ey.com Kenneth Leung (Indirect Tax) kenneth.leung@cn.ey.com Travis Qiu (Transfer Pricing) travis.qiu@cn.ey.com Becky Lai (Tax Policy) becky.lai@hk.ey.com Jesse Lv (Transaction Tax) Jesse.lv@cn.ey.com Samuel Yan (Global Compliance & Reporting) samuel.yan@cn.ey.com Sector Leaders Catherine Li (Financial Services) catherine.li@cn.ey.com Alan Lan (Energy & Resources) alan.lan@cn.ey.com Martin Ngai (Technology, Media, Telecommunications) martin.ngai@cn.ey.com Vickie Tan (Life Science) vickie.tan@cn.ey.com Gary Chan (Real Estate) gary.chan@cn.ey.com Audrie Xia (Consumer Products) audrie.xia@cn.ey.com Walter Tong (Automotive & Transportation) walter.tong@cn.ey.com Raymond Zhu (Government & Public Sector) raymond.zhu@cn.ey.com Greater China Tax Leader Henry Chan henry.chan@cn.ey.com Author China Tax Center Jane Hui jane.hui@hk.ey.com 11

12 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com Ernst & Young, China All Rights Reserved. APAC No ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com/china