Laws and Regulations Update in June 2016

1. Notice of the State Council on Issuing the Transitional Plan on Adjusting the Distribution of the Value-Added Tax Revenue between the Central Government and the Local Governments after the Comprehensive Promotion of the Pilot Program of Replacing Business Tax with Value-Added Tax

This Notice was issued by the State Council on 30th April 2016, stating that the transitional plan described therein would come into effect on 1st May 2016 and the transitional period would be two to three years. According to this Notice, the repayment base for the central government and the payment base for the local governments should be assessed on the base of the year 2014, and the total income from payments for the value added tax would be shared by the central government and the local governments, of which 50% belongs to the central government and the rest 50% would be allocated to and shared by the local governments of the areas of the taxpayers.

(Official Website of the PRC Government:

http://www.gov.cn/zhengce/content/2016-04/30/content_5069490.htm

2. Announcement of the State Administration of Taxation on Publishing the Administrative Measures on Exempting Persons Involved in Cross-Border Taxable Activities and the Program of Replacing the Business Tax with the Value-Added Tax from Paying the Value-Added Tax (for Trial Implementation)

This Announcement was made by the State Administration of Taxation on 6th May 2016, setting forth twenty (20) types of cross-border taxable activities free from the value-added tax. According to this Announcement, parties involved in any of the above activities, except the provision of postal services, collection and delivery services, insurance services for exports, and some of the taxable activities in which parties involved are entitled to enjoy the zero tax rate policy but use the simplified tax calculation methods or issue a waiver of their right to enjoy the zero tax rate policy, shall enter into a written cross-border sale of services or intangible assets agreement, otherwise, they shall pay the value-added tax. This Announcement further specifies that the sale of services or intangible assets abroad are free from the value-added tax if such sale produces income all from abroad, and if otherwise, the value-added tax shall be payable.

(Official Website of the State Administration of Taxation:

http://www.chinatax.gov.cn/n810341/n810755/c2132696/content.html)

3. The Ministry of Finance and the State Administration of Taxation Issue a Series of Policies for the Program of Replacing the Business Tax with the Value-Added Tax                          

The Ministry of Finance and the State Administration of Taxation published a series of policies in the forms of F.T.(2016) No. 43, No. 46 and No. 47 documents, clarifying deed tax, property tax, land value added tax, personal income tax calculation policies that are in effect after the program of replacing business tax with value-added tax was launched, financial policies for the comprehensive promotion of the pilot program of replacing business tax with value-added tax, labor dispatch and road toll deduction policies for the comprehensive promotion of the pilot program of replacing business tax with value-added tax.

(Refer to the Official Website of the State Administration of Taxation for details of the Notice on Clarifying Issues Concerning the Bases for Calculating the Deed Tax, the Property Tax, the Land Value Added Tax and the Personal Income Tax

http://www.chinatax.gov.cn/n810341/n810755/c2102680/content.html

 Notice on Further Clarifying Financial Policies for the Comprehensive Promotion of the Pilot Program of Replacing Business Tax with Value-Added Tax

http://www.chinatax.gov.cn/n810341/n810755/c2111190/content.html

Notice on Further Clarifying Labor Dispatch and Road Toll Deduction Policies for the Comprehensive Promotion of the Pilot Program of Replacing Business Tax with Value-Added Tax

http://www.chinatax.gov.cn/n810341/n810755/c2113107/content.html

 Lawyer Contacts

You Yunting86-21-52134918  youyunting@debund.com/yytbest@gmail.com

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