Recent Important Regulation Highlight

Corporate Income Tax: Tax Benefits for the Development of Western China will Continue

Recently, the SAT and other related departments jointly issued a notice to continue the tax benefits for the development of western China. From 1 January 2021 to 31 December 2030, enterprises set up in the western China region and mainly engaged in encouraged industries will be subject to a reduced corporate income tax rate of 15 percent. In addition, according to the new notice, the required ratio of main business income from encouraged industries to the total income is reduced from 70 percent to 60 percent.

VAT Benefit for SME is Further Extended

Recently, the SAT issued a notice to extend the period of tax benefits for small-scale VAT taxpayers. The updated VAT benefit is that from 1 March to 31 December 2020, small-scale taxpayers of VAT in Hubei Province will be exempted from VAT and VAT rate of small-scale taxpayers in other regions will be reduced to 1 percent.

New Application Regulation for Chinese “Green Card”

China has released the Draft Regulations on Administration of Permanent Residence of Foreigners (2020) for collecting public opinion. According to the new regulation, foreigners can apply for the Chinese green card, if they

have worked in China for four consecutive years, during which the accumulated residence in China is no less than two years, with the annual salary income of no less than six times of the average local wages of the previous year (approximately TRMB460 in Guangzhou, TRMB600 in Shanghai and TRMB570 in Beijing for 2020) and have corresponding tax filing records, or;
have worked in China for eight consecutive years, during which the accumulated residence in China is no less than four years, with the annual salary income of no less than three times of the local average wages of the previous year (approximately TRMB230 in Guangzhou, TRMB300 in Shanghai and TRMB285 in Beijing for 2020) and have corresponding tax filing records, or;
have a spouse who is a Chinese citizen or a foreigner holding Chinese green card and have lived with the spouse in China for five years after marriage, and has accumulated residence of no less than nine months each year in China.

China Adopts the Civil Code

On 28 May 2020, the Chinese Civil Code was passed at the third session of the 13th National People’s Congress, which will take effect on 1 January 2021.

Newsletter China

Newsletter China
- Issue 05/2020

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