Since the last update, quite a few tax regulations in China have
been updated due to changes in government policy.
Circular Number
Issuance Date
Effective Date
Topic
What is new?
Caishui [2012] No. 4
2012-1-12
2012-1-1–2014-12-31
Deed tax exemption for transfer of real estate titles resulting
from certain restructurings
Under the previous Tax Circulars Caishui [2008] No.175 and
Caishui [2010] No.22, deed tax was exempted for transfer of real
estate resulting from qualified restructurings. The two Circulars
have expired on 31 December 2011. This new Circular has extended
such deed tax exemption to 31 December 2014.
According to the new Tax Circular, no deed tax shall be levied
for change of real estate titles resulting from certain
restructurings such as share transfers, mergers and splits of
enterprises.
Caishui [2012] No. 12
2012-2-7
2011-12-1
VAT tax-control devices and related technical maintenance fees
are deductible from VAT payable
According to this Tax Circular, starting from 1 December, 2011,
when VAT payers (including smallscale VAT payers) purchase VAT
tax-control devices for the first time, the whole purchase price
(costs plus input VAT) can be deducted from their VAT payable,
provided that such purchase is supported by a valid VAT
invoice.
In addition, technical maintenance fees related to such devices
can also be deducted from the VAT payable.
On 1 January, 2012, Shanghai started the BT/VAT reform in China
as the first pilot city. Since then, certain services provided by
tax payers in Shanghai or provided by foreign enterprises to tax
payers in Shanghai shall be subject to Value-added Tax
("VAT") and not to the previous Business Tax
("BT"). The Chinese government intends to expand the
BT/VAT reform across China and to cover all services
eventually.
It has been reported recently that Beijing has already submitted
its application to become a pilot city to the Ministry of Finance
("MoF") and the State Administration of Taxation
("SAT"). According to several newspapers, Mr. Ji Lin, the
Deputy Mayor of Beijing, confirmed that Beijing is preparing for
the BT/VAT reform, which is expected to take place in the middle of
2012.
According to news releases, other cities and provinces, such as
Tianjin, Chongqing, Jiangsu and Shenzhen are also trying to become
pilot cities/provinces for the BT/VAT reform.
The Chinese government intends to expand the BT/VAT reform
across China and to cover all services eventually.
It has been reported recently that Beijing has already submitted
its application to become a pilot city to the Ministry of Finance
("MoF") and the State Administration of Taxation
("SAT"). According to several newspapers, Mr. Ji Lin, the
Deputy Mayor of Beijing, confirmed that Beijing is preparing for
the BT/VAT reform, which is expected to take place in the middle of
2012.
According to news releases, other cities and provinces, such as
Tianjin, Chongqing, Jiangsu and Shenzhen are also trying to become
pilot cities/provinces for the BT/VAT reform.
This article was written for Law-Now, CMS Cameron
McKenna's free online information service. To register for
Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance
only. The information and opinions expressed in all Law-Now
articles are not necessarily comprehensive and do not purport to
give professional or legal advice. All Law-Now information relates
to circumstances prevailing at the date of its original publication
and may not have been updated to reflect subsequent
developments.
The original publication date for this article was
19/03/2012.
Specific Questions relating to this article should be addressed directly to the author.
At a time when the contours of business are undergoing major transformations on account of technological advancement across the world, issues such as those deliberated by the Kolkata Tax Tribunal in ITO v. Right Florists Limited1 were bound to arise.
The courts have recently handed down two separate tax decisions, both highlighting the need for vigilance from the taxpayer when managing its tax affairs.
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