China tax newsletters

February 2020 - New Measures for Claiming Treaty benefits

The State Administration of Taxation (the “SAT”) has loosened up its requirements for non-residents of China in claiming the applicable tax treaty benefits, effective 1 January, 2020. The new measures were issued under SAT Public Notice (2019) No. 35 (the” PN 35”) in October 2019. Previously, under the SAT Public Notice (2015) No. 60 (the “PN 60”), pre-approval by the China tax authority in claiming tax treaty benefits was not required, but taxpayers were still required to fulfil the record-filing procedure. The PN 35 goes even further by allowing non-resident taxpayers to determine whether it is eligible for the relevant tax treaty benefits, i.e., a self-assessment of eligibility, and claim such tax treaty benefit as long as the relevant supporting documents are retained for inspection by the tax authority.

This new measure is one of the measures to optimize the taxation business environment and to “streamline administration, delegate powers and improve regulation and services”.

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February 2020 - China's New Foreign Investment Law and Its Impact on Foreign Investment Enterprises

On 15 March, 2019, the National People’s Congress has passed the new Foreign Investment Law of PRC (the “Foreign Investment Law” or the “New Law”), which has come into force on 1 January, 2020. The new law marks the next level of Chinese government’s opening-up policy to enhance a more transparent business environment and to ensure that domestic and foreign enterprises compete on a level playing field, with equal treatment under the unified legislative rules and processes. It is also an attempt by the Chinese government to respond to international criticism from the US in light of the still on- going US-China Trade Negotiation. In particular, the Foreign Investment Law seeks to address common complaints from foreign businesses and governments, such as by explicitly banning forced technology transfers.

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