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By Tony Dong and Daisy Duan   King & Wood Mallesons’ Taxation Group

http://www.kingandwood.com/lawyer.aspx?language=en&id=tony-dongThe invoice plays an indispensable role in economic activity and business operations in China. It also plays an important role in tax scrutiny when tax authorities are collecting taxes and combating tax evasion. It is reported that in 2013, the tax authorities investigated 91,000 cases of selling or producing false invoices or the illegal issuing of invoices  and 130 million illegal invoices were uncovered. Invoice-related non-compliance is found frequently in certain industries such as real estate, construction and installation, medicine and medical equipment, power generation and supply, catering and entertainment, and the education or training industry. The tax authorities have identified 89,000 entities that have illegal invoices issues, and they are pursuing taxes of more than RMB 13.8 billion.
Continue Reading Tax Issues on Receiving Falsely Issued Invoices in “Good Faith”

作者：董刚 段桃 金杜律师事务所税务组

发票在中国社会的经济活动和企业经营中具有不可或缺的作用，也是税务机关“以票控税”进行税收征管、堵塞逃税漏洞的重要手段。据国家税务总局报道，2013年全国共查处制售假发票和非法代开发票案件9.1万起，查获各类非法发票1.3亿份，主要集中在房地产与建筑安装、药品与医疗器械、发电、供电、餐饮娱乐和营利性的教育培训等行业，税务机关查处违法企业8.9万户，查补收入138亿元。
Continue Reading 善意取得虚开发票相关税务问题探讨

ByTony Dong, Daisy Duan  and Jiang Junlu  King & Wood Mallesons Corporate Group

Over the years, it has been a common practice that multinational companies (“Home Entity”) dispatch expatriate employees (“Secondees”) to the affiliated enterprise in China (“Host Entity”) to hold post as senior management or other technical position. Usually, the Home Entity and the Secondees would retain the employment relationship and the Home Entity continues to pay the salaries and social security contribution for the Secondee in the home country, which would be reimbursed by the Host Entity. Since the tax clearance certificate issued by Chinese tax authority is required when the Host Entity makes remittance overseas for the reimbursement payment, the tax authority needs to determine whether the Home Entity constitutes the establishment/place of business (“taxable presence”) or permanent establishment (“PE”) under the relevant tax treaty under the secondment arrangement, which may result in PRC Enterprise Income Tax (“EIT”) consequence for the Home Entity. Nevertheless, there are often disagreements between tax authorities and the Host Entity due to the ambiguity of tax regulations in the assessment of taxable presence or PE under cross-border secondment arrangement, and consequently Host Entity has difficulty in obtaining the tax clearance certificates and cannot remit the payment to the overseas Home Entity. There will be a change from June 1st, 2013.
Continue Reading China Tax: Unveiling the International Secondment Arrangement

作者： 董刚 段桃 姜俊禄 金杜律师事务所公司组

多年以来，跨国企业（“派遣企业”）向境内企业（“接收企业”）派遣人员（“被派遣人员”）担任境内企业高管或其他技术职务的劳务安排非常普遍，通常做法是派遣企业与被派遣人员仍然保持雇佣关系并继续在境外支付工资、薪金及缴纳境外社会保险，然后由境内企业向境外派遣企业支付代垫费用的方式进行偿付。由于境内企业在申请境外支付时需要税务机关出具税务证明，税局通常会判定相关劳务派遣安排是否构成非居民企业在中国的机构、场所或依据税收协定形成常设机构而在中国产生企业所得税的纳税义务，由于过去法规多是原则性的规定，缺乏具体指引，导致税企之间多发争议，阻碍正常的对外支付行为，增加企业的税务合规风险。这一切将在今年6月1日发生重大变化。
Continue Reading 中国税收：掀开国际人员派遣安排的面纱

作者：熊进 冯彩红 刘青 高纬 金杜律师事务所并购组

国家外汇管理局于2012年11月19日发布了《关于进一步改进和调整直接投资外汇管理政策的通知》（汇发[2012]59号，下称“《通知》”），大幅简化直接投资外汇管理流程。《通知》的出台响应了国务院于2012年9月23日颁布的《国务院关于第六批取消和调整行政审批项目的决定》（国发[2012]52号）中规定的推进行政审批制度改革并进一步取消和调整行政审批项目的要求，也反映了中国巨额外汇储备的背景下进一步放松外汇监管的趋势。《通知》将于2012年12月17日开始实施，有望对外商投资和境内企业境外投资流程产生较大影响。

一、 主要调整概述

与现行直接投资外汇管理政策相比，《通知》在监管流程方面有较大的改进，将部分审批事项调整为登记事项，通过登记来监管外汇资金的流动与汇兑额度。
Continue Reading 外汇局颁布新规，进一步放松直接投资外汇管理

By Xiong Jin, Feng Caihong, Liu Qing and Wei Kao  King and Wood Mallesons’ Mergers & Acquisitions Group

On November 19, 2012, the State Administration of Foreign Exchange (“SAFE”) promulgated the Circular Regarding Further Improvement and Adjustment of Policies on Foreign Exchange Administration of Direct Investment (Hui Fa [2002] No. 59, the “Circular”) which aims to dramatically simplify foreign exchange administration procedures concerning inbound and outbound direct investment. The Circular is a response to a directive to reduce administrative approvals in the Decision of the State Council on the Sixth Abolishment and Adjustment of Administrative Examination and Approval Projects (Guo Fa [2012] No. 52) promulgated by the State Council on 23 September 2012, and it also reflects a trend of relaxing foreign exchange supervision given China’s accumulation of major foreign exchange reserves. The Circular will be become effective on December 17, 2012 and is expected to have a significant impact on foreign direct investment and outbound investment by domestic enterprises.
Continue Reading SAFE Issues New Rules to Further Relax the Foreign Exchange Controls over Direct Investment

By Zhao Yan and Daisy Duan King & Wood Mallesons’ Tax Group

On January 1, 2012, the trial of the value-added tax (“VAT”) Transition from business tax to VAT (“VAT Transition”) for transportation and certain modern service industries was implemented in Shanghai. It is a landmark event in Chinese tax reform. In July 2012, the State Council further decided to expand the pilot area to Beijing and seven other provinces and municipalities in stages: Beijing is expected to complete the VAT reform by September 2012; Jiangsu and Anhui provinces are expected to be complete by October 2012; the conversion deadline for Fujian and Guangdong provinces is November 1, 2012; and the deadline for Tianjin Municipality, Zhejiang Province and Hubei Province is December 1, 2012. Furthermore, the VAT Transition pilot areas will continue to be expanded next year and certain industries will be selected as pilots for VAT Transition nationwide.
Continue Reading Brief Analysis on the Impacts of the VAT Transition Pilot Expansion

作者：赵炎 段桃 金杜律师事务所税务组

2012年1月1日在上海市开始实施的将交通运输业和部分现代服务业由营业税改征增值税（“营改增”）的试点，是中国税制改革的一个标志性事件。2012年7月，国务院进一步决定将试点范围由上海市分批扩大至其他8个省（直辖市），其中，北京市应当于2012年9月1日完成营改增转制，江苏省、安徽省完成转制时间为10月1日，福建省、广东省为11月1日，天津市、浙江省、湖北省为12月1日。此外，营改增明年继续扩大试点地区，并选择部分行业在全国范围试点。

营改增将会导致相关行业纳税人的税负发生变化，甚至可能对其经营乃至定价模式产生重大影响。本文作者将从此次营改增的背景出发，分析营改增方案对相关行业的影响，上海方案与北京等新试点地区方案（“新方案”）的区别，并对纳税人如何应对此次改革提出建议。
Continue Reading 浅析营业税改征增值税试点扩围

By Mark Schaub Chen Bing King & Wood Mallesons’ FDI Group Shanghai Office.

State Administration of Taxation of the PRC (“SAT”) promulgated the Administrative Rules on Income Tax for Policy-based Relocation of Enterprises on August 10, 2012 (“Rule 40″) which is set to become effective on October 1, 2012.   Policy based relocation refers to relocations at the request of the authority rather than voluntary relocations by enterprises (see below for more details).

Rule 40 aims at establishing more specific and systematic rules in terms of preferential tax treatments which apply to policy-based relocations. This new rule will replace the Circular on Relevant Issues concerning Enterprise Income Tax on Incomes from Policy-based Relocation or Disposal of Assets promulgated by State Administration of Taxation on March 12, 2009 (“Circular 118”).Continue Reading New Enterprise Income Tax Rule in relation to Enterprise Relocation

By Tony Dong and Philip Liu King & Wood Mallesons’ Tax Group

Technology innovation is the engine that will drive the 21st century economy. With growing economic demand for core technologies from Chinese enterprises, recent years have witnessed the robust development of Intellectual Properties (“IP”) transactions in China, in which tax issues are often important elements to consider when structuring IP transactions, especially for the IP transfers carried out in the context of IPOs, mergers, acquisitions, or investment projects. We will discuss in the article the major PRC tax considerations for IP transfers, especially for cross-border IP transactions, with a view to achieve tax optimization and ensure tax compliance for such transactions.

 I .Tax Cost of IP Transfers
Continue Reading Tax Considerations for IP Transfer