Recent Important Regulation Highlight

The Chinese Stamp Tax Law officially takes effective from 1 July 2022 and relevant implementation standards are issued by the SAT recently to clarify the specific details for the taxpayer and for the taxable vouchers, the specific conditions for tax calculation basis, tax payment and tax refund, and the specific circumstances for tax exemption.

Recently, the SAT has announced that “the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting in China and Its Application to Certain Tax Treaties” enters into force in China on 1 September 2022. The Convention's impacts on China's existing tax treaties include three parts: the tax treaties to which the Convention applies, the clauses amended by the Convention, and the consolidated texts of the Convention and existing tax treaties. China has adopted two types of achievement recommendations in the Convention: the minimum standard clauses of BEPS and other BEPS achievement recommendations usually included in the tax treaties signed by China in recent years.

The MOF and the SAT have jointly issued the announcement to expand the scope of sectors eligible for the full refund of incremental VAT credits on a monthly basis and lump-sum refund of existing VAT credits to:

The SAT has recently issued the announcement to streamline the tax-related items in handling the closure and deregistration procedures of market entities, with effect from 14 July 2022. Compared with the normal operation period, a simpler policy for tax declaration is applied during the closure period, and the market entity may choose to prepay and declare the enterprise income tax and individual income tax on a quarterly basis.