1.  Streamlining Payments

As a result of the COVID-19 outbreak last year, the tax authorities implemented a series of measures which made online payment possible for nearly 200 tax and fee items. This was implemented to minimise the need for contact between taxpayers and tax officials during the pandemic. The Head of the State Administration of Taxation has recently stated that at present 90% of tax payment services and 99% of tax filing services are accessible online. He also said that work was continuing along these lines that a more efficient and streamlined service was the goal of the SAT including upgrading smart services and introducing tailored services to better invigorate market entities.

In the same vein the SAT also announced that the pilot programme for VAT e-invoices had been extended to 11 provinces and cities since December 21st.The tax Ukey needed to issue such invoices are to be given for free taxpayers as defined by tax authorities of the relevant provinces/cities but the e-invoices issued by those taxpayers may be used across the whole of mainland China. The electronic seal affixed to the invoice can be verified by the use of a nationwide platform. The SAT has clarified that it will continue to modernise its invoice systems.

This ongoing move to online systems will make life easier, especially those small and medium sized entities who traditionally have had to send Chinese-speaking employees to the tax office, which in turn will have affected their productivity. The increase in online facilities will be welcome news for all companies.

2.  Imports

Of interest to all importers will be the news that the General Administration of Customs has said that whilst the overall tax rates on imported goods have dropped, the amount of revenue has increased. The GAC announced that the overall tax rate had dropped from 21.8% to 15.8% from 2016-2020, primarily as a result of VAT and tariffs being reduced. However, the GAC also announced that the total revenue had increased by 8.7% during that same 5 year time frame.  The GAC clearly sees a link between the reduction of taxes and the growth of imports to China.

3.  Reconciliation Requirements for Employers

In Announcement [2021] No.2 the SAT announced that employers who complete the 2020 annual reconciliation on behalf on their employees must first obtain confirmation from the employee before doing so. This confirmation must be given either electronically (e.g., via WeChat or email) or in writing.

Reference:

http://www.xinhuanet.com/english/2021-01/11/c_139657600.htm

http://www.xinhuanet.com/english/2021-02/25/c_139767022.htm

http://www.chinatax.gov.cn/eng/c101269/c5161519/content.html