China

China’s Environmental Protection Tax Law in effect from January 1st, 2018

China’s Environmental Protection Tax Law to reduce pollution levels

This year, China is going to effectively start its battle against environmental pollution. Announced by the State Council, the Implementation Rules for the Environmental Protection Tax Law (EPT Law) and the Law itself took effect on January 1st, 2018. Businesses in China, and prospected market entrants, need to fully understand the Law’s implications and implementation to legally operate in the market without facing high impacts on their finances. In addition, the Law sets new opportunities for foreign companies in environmental protection fields. 

Transfer Pricing Advantages

First of all, what is transfer pricing?
Transfer Pricing is the price to which one headquarter transfers products or services to its associated enterprises located in different countries. Transfer prices are applied to multinational groups to evaluate the performance of their different members (branches and subsidiaries).

The Taxation System in China

The Chinese Taxation System – China Tax Main Table

 Broadly defined as having profit <500,000 RMB/year

2As outlined by the Chinese Government

 

Individuals working in China Mainland are also taxed. The tax is called Individual Income Tax (IIT) and is levied according to 11 different categories of income:

10 steps to open a foreign invested company in China.

10 steps to open a foreign invested company in China.
Opening a foreign invested company in the Chinese market can seem, and can become, over complicated. Normally is advisable to avoid taking this path alone, especially without a good Chinese language proficiency and without network. The business environment for Western-leaded companies is unique, it is more complex and controversial than any other country.

Value Added Tax (VAT) for foreign companies in China

In China, the VAT system is equally applied to foreign and local companies working in the territory. Unfortunately, as foreigners, we don’t enjoy any benefit related to VAT rates. But, with the appropriate support a foreign company might gain some deductions.

Where does the VAT apply? 

VAT for foreign companies in China, as well as for Chinese companies in China, is applied on the sale of goods, repair and/or replacement of services, and on the import of items into China Mainland. Following the VAT reform in 2016, VAT is levied also on:

Income tax brackets in China for employees, self-employees and corporate

As Partner of S.J. Grand Financial & Tax Advisory, in China since the early 90’s, I can recommend gathering all the possible insights on corporate and individual taxation in China. Comply with rules, avoid illegal practices for the both the mother company and branch’s sake.

Here’s a summary of the main taxation levied on companies and employees in China.

Corporate taxation in China includes:

-        Corporate Income Tax (CIT)

How can a foreigner register his company in China?

First, sit down and set your strategy out. Once your strategy is well defined, the decision to invest in China has been taken with the approval of investors, and all human and financial resources have been gathered, you are ready to register your company.

Regulations of China (Shanghai) Pilot Free Trade Zone released

It has been almost one year now since the Free Trade Zone (FTZ) has been launched.  During this time, a number of regulations have been issued by various authorities, such as the Ministry of Finance, the General Administration of Customs, the Ministry of Transport, People’s Bank of China, etc.

Interpretation of the SHIAC Pilot Free Trade Zone Arbitration Rules

Just recently, on 1st May 2014 the China (Shanghai) Pilot Free Trade Zone Arbitration Rules came into effect. Formulated by the newly structured Shanghai International Arbitration Center (SHIAC) the regulations consist of 10 chapters and 85 articles. In line with international developments, the framework shall provide an alternative way for contractual and property rights dispute resolution in contrast to enduring court proceedings.

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