Viewpoints from Kaizen

According to the Decision on Amending the Law of the People’s Republic of China on Individual Income Tax reviewed and adopted at the 18th Session of the Standing Committee of the 10th National People’s Congress on October 27, 2005, the taxpayer “with individual income exceeding the amount stipulated by the State Council” shall declare taxes by himself/herself, widening the scope of self-declaration by taxpayers. Thereafter, the State Council stipulated that “the individual income exceeding the amount stipulated by the State Council” means “annual income of over RMB120,000” by amending the Implementing Rules of the Law on Individual Income Tax and authorized the State Administration of Taxation to formulate specific management measures. According to the provisions above and the principle of “providing convenience to taxpayers, regulating high incomes, facilitating tax collection and administration, and stressing on key management issues”, the State Administration of Taxation formulated and issued the Self-Declaration Rules Concerning […]

State Administration of Taxation on the Issuance of the Circular of “Provisional Measures for Tax Collection and Administration of Representative Offices of Foreign Enterprises” State Tax Rule [2010] No. 18 Date printed :2010-02-20 The state tax authorities and regional tax authorities of all provinces, autonomous regions, municipalities and cities under separate state programs: In order to regulate the tax collection and administration of representative offices of foreign enterprises, please follow and implement the “Provisional Measures for Tax Collection and Administration of Representative Offices of Foreign Enterprises” issued to you by the State Administration of Taxation. Please reflect to the State Administration of Taxation (International Tax Division) for any problems encountered during implementation. State Administration of Taxation 20 February 2010 Provisional Measures for Tax Collection and Administration of Representative Offices of Foreign Enterprises 1. In order to regulate the tax collection and administration of representative offices of foreign enterprises, these provisional […]

Pre-approval by: Tourism Market Management Department of Shanghai Municipal Tourism Administrative Commission Time frame for pre-approval: Verification of the application shall be completed by Shanghai Municipal Tourism Administrative Commission within 30 working days after acceptance. If approved, it shall be submitted to the National Tourism Administration of P.R.C. for approval. Qualifications of the Applicant: The applicant shall be an enterprise engaged in travel business in Taiwan, Hong Kong and Macao and overseas countries and meet the following conditions: 1. It has been legally registered in its own country (region) and the registered scope of business includes traveling business; 2. It has good credit rating and formal membership in the trade association of travel agencies or similar organization in its own country (region); 3. It has engaged in travel business of sending tourists from its own country (region) to China for more than two years and the number of tourists it […]

1. Preferential policies for software and integrate circuits industries a. From June 24, 2000 till the end of 2010, General taxpayers selling software developed by themselves shall pay VAT at the rate of 17%. However, if the actual VAT is more than 3%, the surplus amount of VAT shall be refunded at the same time of payment. Integrate Circuits designing enterprises are regarded as software enterprises and enjoy the same policies. The refund shall not be regarded as taxable income and enterprise income tax shall not be pre-raised, provided that such refund is used to re-invest in research and development of software products and enlargement of production. b. From June 24, 2000 till the end of 2010, General taxpayers selling integrate circuits (including mono-crystalline silicone) produced by themselves shall pay VAT at the rate of 17%. However, if the actual VAT is more than 6%, the surplus amount of VAT […]

Presently, foreign invested enterprises in China will be able to enjoy the following preferential treatments for taxation: A. Income Tax Preferential Policies for Foreign Invested enterprises 1. Reduction of tax rate a. The income tax of the following foreign invested enterprises and projects shall be levied to the rate of 15%: (1) Foreign-invested enterprises located in special economic zones, foreign enterprises who establish institutes, sites in special economic zones for production and operation, and manufacturing foreign invested enterprises located in economic and technological development zones. (2) Starting from January 1, 1999, manufacturing foreign invested enterprises investing in infrastructure projects of energy, transportation, ports and docks, with subject to approval by the State General Administration of Taxation, without restriction of locations. (3) Foreign-invested enterprises located in the old sections of the cities which are called coastal open areas and economic and technological development zones, and operating projects of the category of […]

The Individual Income Tax Law of the PRC allows deductions from certain categories of income in computing the individual income tax of foreign resident taxpayers, as follows. Taxable income Deduction Income from wages and salaries RMB1,600 per month Additional allowance on wages and salaries for foreign expatriates RMB3,200 per month Income from compensation for personal services, author’s remuneration, royalties or the lease of property: If the expenses amount to a single payment of not more than RMB4,000 RMB800 If the expenses amount to a single payment in excess of RMB4,000 20% Notes: 1. For income from compensation for personal services, author’s remuneration, royalties or the lease of property, the economic substance of a transaction will determine whether income received in several installments of not more than RMB4,000 each (and thus eligible for multiple RMB800 standard deductions) will be treated as a lump sum. If the installment payments are the result […]

Introduction (1) Economic Scale Advantage Shenzhen Special Economic Zone is the first special economic zone whose establishment was initiated and promoted by Deng Xiaoping, the chief designer of Chinese reform and opening. As an experiment for promoting the development of economic and social development of China, Shenzhen has obtained great success. Shenzhen has formed a characteristic economy featuring high-tech industry, logistics, finance and information services. Various social causes have enjoyed simultaneous development and a market economy system has been increasingly perfected. Shenzhen has set an example to the whole country and played a role of example and promotion. In 2002, its GDP reached 223.941 billion. Its total import and export amount was USD 87.1 billion, including an export value of USD 46.52 billion. Its total industrial output value was RMB 422.1 billion. The output value of high-tech industry accounted for 46% of the total industrial output value. By the end […]

Shenzhen Human Resource and Social Insurance Bureau had announced the Notice on the Adjustment of Shenzhen Minimum Wages on December 30, 2013, the new policies shall be implemented from February 1, 2014. The changes or adjustment are as follows: 1. The minimum wages for Full-time employment worker: RMB1,808 per month. 2. The minimum wages for part-time employment worker: RMB16.5 per hour.

Shenzhen Human Resource and Social Insurance Bureau had announced the Provisions of Shenzhen Medical Insurance on December 2, 2013, the new policies shall be implemented from January 1, 2014. The changes or adjustment are as follows: 1. Change the name of Integrated Medical Insurance, Hospital Medical Insurance, Off-farm Workers Medical Insurance to the First Grade, Second Grade and Third Grade Basic Medical Insurance. 2. First Grade Basic Medical Insurance: the contribution rate for the Local Supplementary Medical Insurance to be paid by the employer is adjusted from 0.5% to 0.2%. 3. The Third Grade of Basic Medical Insurance: besides the current basic medical insurance, local supplementary medical insurance shall be contributed too. Currently, the amount is fixed, RMB8 contributed by employers and RMB4 by employees, which shall be adjusted to contribute by percentage. The basic value is the local average monthly salary of the previous year (e.g. RMB4, 918 for […]

According to the Statement on the Average Salary for the Year of 2013 issued by Shenzhen Statistic Bureau, the average salary for the year of 2013 in Shenzhen is RMB5, 218. Starting from July 1, 2014 to June 30, 2015, the contribution base for social insurance in Shenzhen will be adjusted to RMB5218 accordingly.