December 2017 - New Rules On The Timing Of Withholding Tax On Payments To Non-Residents

In October 2017, the State Administration of Taxation (“SAT”) released the “Bulletin on Matters Regarding Withholding Enterprise Income Tax at Source for Non-Resident Enterprises” (“SAT Bulletin [2017] No. 37, Bulletin 37”). Bulletin 37 has taken effect on 1 December 2017.

Bulletin 37 will bring significant changes to the way that Chinese payers as withholding agents deal with the withholding obligations. Bulletin 37 also repeals previous guidance issued in 2009, being “Interim Administrative Measures on the Collection of Withholding Income Tax on Nonresident Enterprises” (Guoshuifa [2009] No. 3) (“Circular 3’) and some relevant articles in other circulars.