Clarification on Corporate Income Tax (CIT) Incentives for Advanced Technology Service Enterprises (ATSE)

The Ministry of Finance, the State Administration of Taxation, the Ministry of Commerce, the Ministry of Science and Technology and the National Development and Reform Commission jointly issued Caishui 2014 No. 59 (Circular 59) on 8 October 2014. Regarding the CIT incentives for ATSE, Circular 59 updates Circular 65 by extending the incentive expiration date to 31 December 2018 and relaxing recognition criteria on income derived from offshore outsourcing service.

Notice Regarding Procedural Guidelines for Foreigners with Short-term Employment in China (Trial)

On 6 November 2014, a notice was jointly issued by the Ministry of Public Security, Ministry of Human Resources and Social Security, Ministry of Foreign Affairs and Ministry of Culture to provide procedural guidelines on the immigration requirements for foreigners who have short-term employment in China (RenSheBuFa 2014 No. 78). The notice will come into force on 1 January 2015.

China Customs released Provisional Measures on Credit Management of Enterprises

The General Administration of Customs announced the Provisional Measures of the PRC on Credit Management of Enterprises on 8 October 2014, and it will come into operation on 1 December 2014.

Exemption of Stamp Duty on the Loan Contract between Financial Institute and Small and Micro-sized Companies

In order to encourage the financial institute to provide financial support to the small and micro-sized companies, Ministry of Finance (MOF) and State Administration of Taxation (SAT) issued the following policy on stamp duty:

China to Update Customs Audit Regulations

The Legislative Affairs Office of the State Council of the PRC is holding public consultations on the Customs Audit Regulations of the People's Republic of China(Revision Draft)prepared by the General Administration of Customs of the PRC (hereinafter referred to as the ‘Revision Draft’). The new Customs Audit Regulations is expected to be released this year.

SAT Notice regarding the exemption of Value-added Tax (VAT) and Business Tax of Small and Micro-sized Companies

State Administration of Taxation (SAT) released “SAT Notice regarding the exemption of Value-added Tax (VAT) and Business Tax of Small and Micro-sized Companies” stipulating the following preferential VAT and BT policies:

Central Government Launches New Preferential Policy of Accelerated Depreciation of Fixed Assets

State Council executive meeting has recently improved the deployment of accelerated depreciation of fixed assets in order to promote the enterprise technological innovation and to support SME businesses.

Notice regarding the launch of tax anti-avoidance investigations on remittance of substantial amounts of service fees and royalty payments (Shuizongbanfa [2014] No. 146)

On 29 July 2014, the General Office of State Administration of Taxation (SAT) released an internal notification(“Circular 146”) to urge tax authorities at all levels to carry out extensive tax investigations on substantial amounts of service fees and royalties payments made by domestic enterprises to their overseas related parties from 2004 to 2013 (hereinafter referred to as “Investigations”). The key focus is the payments made to tax haven and low tax rate countries.

State Administration of Taxation Announcement No. 49

On 27 August 2014 China’s State Administration of Taxation issued Announcement No.49 of 2014 (“SAT Announcement 49”) which is a comprehensive statement of the policies for claiming exemption from Value-Added Tax (“VAT”) under the VAT pilot program in China for exported services. SAT Announcement 49 will become effective from 1 October 2014.

Decree No. 76 of China Ministry of Finance People's Republic of China - Decision of Changes on "Basic Standards for Business Enterprises Accounting Standards"

The decision made by Ministry of Finance to amend the Basic Standards of Accounting Standards for Business Enterprises has been considered and approved by the meeting of the Ministry of Finance, is hereby announced and starts to be implemented from the date of announcement -23 July 2014.