Chinese walker

Legal authority
The PRC Tax Levy and Administration Law and its Detailed Implementation Regulations
Tax registration
Every foreign investment enterprise (FIE) shall apply for a tax registration at both the national tax office and local tax office.
Types of tax registration:-

National income registration and local income tax registration. Both registrations are mandatory and the registration application must be submitted within 30 days of obtaining the business license from the local office of “State Administration of Industry and Commerce” at the city level or above;

Read more…

It has been a 13-year journey from the preliminary work in 1994 to the passing of thePRC Enterprise Income Tax Law (referred to as “the EIT Law” hereafter) on 16th March 2007, which marked the completion of the unification of two tax systems for  domestically funded and foreign funded enterprises in China. It is a system innovation in the process of building socialism and a harmonized society within the country. To reap the benefits of the new tax system depends very much on its implementation in an effective manner. A few days ago, the State Council announced the long-awaited  Implementation Regulations of the PRC EIT Law (referred to as “the Implementation Regulations” hereafter), which is to come into play with the implementation of the  EIT Law.

Read more…

In the 1994 tax reform, the price and allocation for some part of mineral products were still regulated under state planning due to historical issues. As from May 1994,the tax rates for extracts of metallic and non-metallic mineral products were adjusted from 17% to 13% to stabilize and develop the excavation industry. But that also brought along some issues:

Read more…

The scope of fixed asset under the current tax rules includes machinery, equipment, means of transportation, equipment and tools that are related to production and business operations. The scope of fixed assets eligible for deduction after the transformation reform remains the same. Immovable assets such as buildings and structures are not included for VAT deduction purposes.

Under the working plan of the State Council, as from 1st July 2004 the experimental trial began with the equipment manufacturing and petrochemical industries located in the three northeast provinces in China; as from 1st July 2007, the scope of the experimental trial was expanded to power-generating and excavation industries in the 6 central provinces; as from 1st July 2008, the scope of the experimental trial was expanded to the 5 prefecture in the Inner Mongolia Autonomous Region and Min Chuan region in Sichuan where it was hit hardest by the earthquake. With the exception for Min Chuan region in Sichuan where it was hit hardest by the earthquake, the deduction of input VAT for purchased capital equipment works in the following way: the input VAT paid for purchased capital equipment shall be offset against the unpaid VAT liability. If the input VAT for purchased capital equipment is more than the unpaid VAT liability, the balance shall be used for offset against the VAT payable in the current year. If there is any input VAT left, it can be carried forward for offset in future periods.

Read more…

The contents of the VAT transformation reform include the following: where the taxpayer throughout the nation (irrespective of regions and industries) has paid VAT for the purchase of capital equipment, the input VAT can be offset against the output VAT. If the input VAT is not yet fully offset, the balances can be carried forward for use in future periods. To plug any tax loophole, the tax rules shall exclude the VAT paid for small passenger vehicles, motorcycles and yachts that are subject to consumption tax. As a measure to implement the transformation reform the following policies shall be put into effect at the same time: the VAT exemption policy for the imported capital equipment and the VAT refund for the purchase of domestically manufactured capital equipment shall be axed; the levy rate for small scale taxpayer engaged in production and non-production business shall be reduced to a uniform rate of 3%; the VAT rate for mineral products shall be increased to 17%.

The VAT transformation reform allows the input credit for the purchase of capital equipment to be offset against the output VAT. That will eliminate the double taxation resulting from the adoption of the production-type VAT system, reduce the
tax burden for investment in capital equipment, and a major tax cutting policy without introducing a change in the urrent tax rates. Since it can avoid double tax in the purchase of capital equipment, it will encourage investment, increase the demand in the domestic market, promote technological advancement, adjust the industry structure and the transformation pattern of the economic growth. Currently, the financial tsunami triggered by the sub-prime mortgage crisis has spread to Europe,Asia, and Latin America. Global economic growth rate has obviously been slowed down. Some countries have shown signs of economic recession. The financial crises have adverse impact on the real economy.

Read more…

RESTATED CERTIFICATE OF INCORPORATION

OF
AAA, INC.
(a _________(PLACENAME) Corporation)
The original Certificate of Incorporation of the corporation was filed with the Secretary of State of _________(PLACENAME) on _________(M,D,Y) and a restated Certificate of Incorporation was filed on _________(M,D,Y). The following Restated Certificate of Incorporation (the Restated Certificate) has been duly adopted by the Board of Directors and the Stockholders pursuant to Sections 242 and 245 of the _________(PLACENAME) General Corporation Law.

Read more…

The first is to allow deduction of the input VAT for purchased fixed assets. Before the amendment, input VAT is not allowed to get deducted from the output VAT. The production type VAT system is adopted and that has increased the tax burden of the enterprise buying the machinery and equipment. To reduce the tax burden, the revised VAT regulations remove the practice of such non-deduction, and allow the taxpayer to deduct the input VAT for purchased fixed assets. That helps achieve the transformation of the production type VAT system to one of consumption type.

Read more…

A: The principles having been followed in the amended VAT regulations taking into consideration of the economic situation and the urgency of the transformation reform are as follows:

Read more…