China tax newsletters
Mazars’ comments on tax issues in the People’s Republic of China.
November 2018 - 5-Year Rule Under the New Individual Income Tax Law – Exposure Draft of the “Implementation Rules”
On 31 August, the Standing Committee of China’s National People’s Congress formally approved the Amendments to the PRC Law on Individual Income Tax (the “New IIT Law”). Please refer to Mazars’ Tax Commentary issued in September 2018, for a summary. The exposure draft of the “Implementation Rules of the new Individual Income Tax Law” (the “Draft Implementation Rules”) was issued on 20 October for public consultation. The deadline for public consultation was set at 4 November of this year.
September 2018 - The PRC Law on Individual Income Tax (“IIT”) Amendments Approved
On 31 August, the Standing Committee of China’s National People’s Congress formally approved the Amendments to the PRC Law on IIT (the “Amendments”).
April 2018 - The PRC SAT issued Public Note 11 to update interpretations of tax treaty articles
On 9 February 2018, the PRC State Administration of Taxation (“SAT”) issued Public Notice [2018] No. 11 (“PN No.11”). The circular updates the SAT’s interpretation of a few selected articles under Double Tax Agreements (“DTAs”) that are concluded by China and clarifies the tax treatments of partnerships.
February 2018 - Beneficial Ownership – Further Guidance From China Tax Authority
In order to be able to enjoy tax treaty benefits with China, the taxpayer must be a tax resident of the jurisdiction which has entered into the tax treaty with China. In addition, in order to obtain a preferential treatment on dividends, interest, and royalties from China, the non-resident must also be the “Beneficial Owner” of such income.
January 2018 - Withholding Tax (“WHT”) Deferral for Foreign Re-investment in China
Under the Enterprise Income Tax Law before the change, dividends derived by a non-tax resident enterprise (“Non-resident entity”) are subject to a withholding tax at 10% unless a more favourable tax treaty benefit applies. In August 2017, the State Council released measures to improve the business environment for foreign investors in China, including the proposal to allow foreign investors to enjoy a withholding tax deferral treatment.
Our experts
