CMS, China | Chinese Tax Regulation Update | July 2020
Dear Sir or Madam,
Please find enclosed our update on the latest developments on Chinese Tax Law.
Kind regards,
CMS, China
Circular
Number |
Issuance
Date |
Effective
Date |
Topic |
What is new? |
| Caishui [2020] No. 31 jointly released by the Ministry of Finance (“MOF”) and the State Administration of Taxation (“SAT”) |
2020-06-23 |
2020-01-01 |
Preferential Corporate Income Tax (“CIT”) policies in Hainan Free Trade Port (“FTP”) |
In order to support the central government’s policy for developing the economy of Hainan FTP, the MOF and the SAT have issued this Circular to provide the following CIT breaks to the enterprises registered in Hainan FTP:
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Enterprises of the encouraged industries and having substantial operation in Hainan FTP are allowed to enjoy a reduced CIT rate of 15%. Qualified branches set up in Hainan FTP are also entitled to the reduced rate. |
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Incomes generated from the qualified incremental foreign direct investments made by the enterprises of the tourism, modern service and high-tech industries are exempt from CIT. |
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Expenditures made by the enterprises for the newly acquired (including self-built and self-developed) fixed assets or intangible assets (excluding immovable properties) can be deducted from the taxable income of the current year for CIT purposes in a one-off manner, if the asset’s unit value does not exceed RMB 5 million. The acquisition costs can be depreciated and amortized over a shorter period of years or be subject to the accelerated depreciation or amortization methods, if the asset’s unit value exceeds RMB 5 million. |
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| Caishui [2020] No. 32 jointly released by the MOF and the SAT |
2020-06-23 |
2020-01-01 |
Preferential Individual Income Tax (“IIT”) policies for high-end and urgently needed talents in Hainan FTP |
In order to support the central government’s policy for developing the economy of Hainan FTP, the MOF and the SAT have issued this Circular to stipulate that Hainan-sourced incomes of high-end and urgently needed talents can be exempt from IIT exceeding the IIT payable corresponding to an effective IIT rate of 15%. The incomes qualified for this policy include comprehensive income, business operation income and talent subsidies recognized by the Hainan government. Taxpayers will enjoy the aforementioned preferential IIT policy when making annual IIT declarations in Hainan Province. Hainan government will, together with the MOF and the SAT, issue the relevant list-based administrative measures for detailed implementation of this policy. |
| Announcement [2020] No. 33 jointly released by the MOF, the General Administration of Customs (“GAC”) and the SAT |
2020-06-29 |
2020-07-01 |
Duty-free shopping policies upon departure from the Hainan Island |
In order to support the central government’s policy for developing the economy of Hainan FTP, the MOF, the GAC and the SAT have issued this Circular to provide the following duty-free policies to tourists who leave the Hainan Island after shopping:
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Import duty, import VAT and Consumption Tax are exempted for tourists who leave the Hainan Island (but still not leave the PRC) after shopping at the outbound duty-free stores or through approved online sales channels. |
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The annual duty-free shopping quota per person in the Hainan Island is RMB 100,000. There is no restriction on the times of shopping each year. |
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The categories of duty-free goods cover 45 types. Limitation of quantity is set for each shopping (i.e., each departure from Hainan Island via aeroplane, train or ship) on cosmetics, smartphones and alcohol products. |
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The shopping value exceeding the annual quota and the purchased goods exceeding the quantity limit shall be subject to import taxes. |
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The currently qualified outbound duty-free stores include Haikou Meilan Airport Duty-free shop, Haikou Sun and Moon Plaza Duty-free Shop, Qionghai Bo’ao Duty-free Shop and Sanya Haitang Bay Duty-free Shop. |
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The duty-free commodities are for consumers’ personal use and are not allowed for resale in the domestic market. |
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This information is provided for general information purposes only and does not constitute legal or professional advice. Copyright by CMS, China.
For further information, please contact:
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This information is provided for general information purposes only and does not constitute legal or professional advice. Copyright by CMS, China.
CMS, China
“CMS, China” should be understood to mean the representative offices in Mainland China of CMS Cameron McKenna Nabarro Olswang LLP, CMS Francis Lefebvre Avocats and CMS Hasche Sigle, working together. CMS, China is a member of CMS Legal Services EEIG, a European Economic Interest Grouping that coordinates an organisation of independent member firms. CMS Legal Services EEIG provides no client services. Such services are solely provided by the member firms in their respective jurisdictions.
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