Recent Important Regulation Highlight

Recently, the Ministry of Finance, the General Administration of Customs and the State Taxation Administration jointly issued the Notice on Tax Policies for Exported and Returned Goods in Cross-border E-commerce, which is effective from 30 January 2023. If the export is declared under the cross-border e-commerce customs supervision code 1210, 9610, 9710, or 9810 within one year from the date of issue, and the goods (excluding food) are returned to the exporting country in an unchanged state within six months from the date of export, import duties, import VAT and consumption tax will be exempted; export duties collected on export may be refunded, and the VAT and consumption tax that have been collected on export can be handled by reference to tax regulations on the return of goods for domestic sales. If the declarations for tax refund on export have been completed, the relevant enterprise shall pay the refunded tax in accordance with the applicable provisions.

From 1 January to 30 March 2023, withholding agents may apply for the refund of IIT withholding service fees for 2022 via the IIT e-tax platform. Furthermore, if an enterprise acting as withholding agent, withholds turnover tax and/or CIT for overseas companies, it can also apply for a refund of the withholding service fee on the online tax platform. It should be noted that the refunded service fee shall be treated as service income and subject to VAT and CIT.

Recently, the Ministry of Commerce and the People’s Bank of China have jointly issued a Circular to further support foreign trade enterprises to expand the cross-border use of RMB and to promote the facilitation of trade and investment. According to the Circular, banks will provide more convenient and efficient settlement services to facilitate the use of renminbi-denominated settlement for various cross-border trade and investment. More qualified enterprises, especially SMEs, will be included in the scope of the facilitation policy and can directly handle cross-border RMB settlement without submitting supporting documents in advance case by case.

The regulation on provisional postponement of social security payments issued in 2022 was expired now. After the expiration of the current regulation, enterprises are allowed to make supplementary payments of the deferred social security by installments or on a monthly basis by 31 December 2023 according to their own operation conditions. No late payment fee will be charged during the payment period.