Welcome to issue 35  of Weekly Alert covering technical development in taxation around the globe.
TAX – PRC
1. The Standing Committee of the National People's Congress Decided to Amend Four Foreign Investment Laws
On 3 September 2016, the Standing Committee of the National People's Congress decided to amend the following foreign investment laws:-
- The Law of the People's Republic of China on Wholly Foreign-owned Enterprises;
- The Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures;
- The Law of the People's Republic of China on Sino-Foreign Cooperative Joint Ventures; and
- The Law of the People's Republic of China on the Protection of the Investments of Taiwan Compatriots.
The amended four foreign investment laws replace the existing requirements for seeking Ministry of Commerce's ("MOFCOM's") approval for setting up foreign invested enterprises ("FIEs") which are not subject to national market access restriction by record filing administration procedures. The amended four investment laws will take effect from 1 October 2016.
2. The Interim Measures for the Record-filing Administration for the Incorporation and Change of Foreign-invested Enterprises (Draft for Comment)
The MOFCOM issued the "Interim Measures for the Record-filing Administration for the Incorporation and Change of Foreign-invested Enterprises (Draft for Comment)" on 3 September 2016.
The draft interim measures are released in order to facilitate the decision of the Standing Committee of the National People's Congress on amending the four foreign investment laws as mentioned above. Under the draft interim measures, FIEs should submit their incorporation declaration form and the related documents to MOFCOM through the record filing system after the pre-registration approval of the FIEs' names either before the issuance of their business license or within 30 days after the issuance of their business license.
Public can provide their comments on the draft interim measures by 22 September 2016.
3. The Standing Committee of the National People's Congress Approved the Tariff Concession Schedule
On 3 September 2016, the Standing Committee of the National People's Congress passed "the Decision on Approving the Amendment to Tariff Concession Schedule of the Accession of the People's Republic of China into the World Trade Organisation".
China will gradually reduce the tariff of 201 types of information technology products to zero within three, five or seven years. The information technology products include telecommunication products, audio-visual products, medical equipment and etc.
TAX – INTERNATIONAL
1. OECD Secretary-General Report to G20 Leaders
On 5 September 2016, the Organisation for Economic Co-operation and Development ("OECD") Secretary-General submitted a report to the G20 Leaders in Hangzhou. The report consists of two parts. Part I is a report regarding (a) the Base Erosion and Profit Shifting ("BEPS") Project, (b) tax transparency, (c) tax policy tools to support sustainable and inclusive growth and (d) tax and development. Part II is a progress report to the G20 by the Global Forum on Transparency and Exchange of Information for Tax Purposes.
85 countries and jurisdictions have joined the inclusive framework on BEPS. The Multilateral Competent Authority Agreement for Common Reporting Standard, which is a tool by which jurisdictions agree the details of the automatic exchange process, now has a total of 84 signatories.
The OECD will prepare a list by the 2017 G20 Leaders' Summit of those relevant jurisdictions that have not yet sufficiently progressed toward a satisfactory level of implementation of the agreed international standards on tax transparency.
OECD Secretary-General Report to G20
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