CMS, China | Chinese Tax Regulation Update | January 2023



CMS, China
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?
Announcement [2023] No. 1 jointly released by the Ministry of Finance (“MOF”) and the State Administration of Taxation (“SAT”)


SAT Announcement [2023] No. 1 		2023-01-09











2023-01-09

2023-01-01











2023-01-01		 VAT reduction and exemption policies for the relevant taxpayers The Announcements stipulate the VAT reduction and exemption policies for the relevant taxpayers as well as the associated implementation issues for 2023. The following information in the two Announcements is worth attention:

• From January 1, 2023 to December 31, 2023, a small-scale VAT payer whose monthly turnover does not exceed RMB 100,000 (or whose quarterly turnover does not exceed RMB 300,000 in the case of quarterly filings) is exempt from VAT. The monthly or quarterly turnover above for VAT exemption testing purposes refers to the total VAT-able turnover minus the revenues derived from the sale of immovable properties. Taxpayers have the right to choose to give up the VAT exemption treatment and to issue special VAT invoices accordingly.
   
• Rental incomes derived from the lease of immovable properties by “other individuals” interpreted in the VAT regulations can be evenly amortized to each month over the corresponding lease term for VAT exemption testing purposes, in the event that such rental incomes are collected on a lump-sum basis.
   
• From January 1, 2023 to December 31, 2023, small-scale VAT payers’ turnovers which are statutorily subject to the VAT levy rate of 3% can be subject to a reduced levy rate of 1%. Taxpayers have the right to choose to give up the VAT reduction treatment. Other VAT prepayments which are statutorily subject to the levy rate of 3% can also be subject to the reduced levy rate of 1%.
   
• The validity period of input VAT super-credit policy for taxpayers of production-related and living-support service industries has been extended to December 31, 2023, but the super-credit rate for taxpayers of production-related service industries has been reduced to 5% and for taxpayers of living-support service industries has been reduced to 10% for the period from January 1, 2023 to December 31, 2023.
   
Announcement [2023] No. 2 jointly released by the MOF and the SAT 2023-01-16 2023-01-01
 Extension of the validity period of preferential PRC Individual Income Tax (“IIT”) policies for the stock incentive schemes of listed companies and the Mainland China-Hong Kong securities connection programs The Announcement extends the validity period of the preferential IIT policies for the listed companies’ stock incentive schemes (i.e., the stock incentive incomes can be subject to separate IIT calculation) and for the Mainland China-Hong Kong securities connection programs (i.e., the capital gains derived from the disposal of Hong Kong-listed companies’ stocks and the shares of Hong Kong investment funds through the Mainland China-Hong Kong securities connection programs are exempt from IIT) has been extended to December 31, 2023.
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:

       
Gilbert Shen
Counsel
 Head of Tax Practice Area Group
CMS, China

T +86 21 6289 6363
E gilbert.shen@cmslegal.cn		 Sherry Huang
Junior Tax Consultant
CMS, China


T +86 21 6289 6363
E sherry.huang@cmslegal.cn
       

 

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.
cms.law   Disclaimer   Privacy Statement

Shanghai Office Beijing Office

3108 Plaza 66, Tower 2
1266 Nanjing Road West
Shanghai 200040, China

 

 

Room 1909, China Youth Plaza,
No. 19 Dongsanhuan North Road,
Chaoyang District
Beijing 100026, China