China alert - Issue 26, July 2011
Time flies, and we are already in the middle of 2011. The Chinese authorities have issued numerous important tax regulations over the past six months. The State Administration of Taxation (SAT) has provided some guidance on some specific tax issues in respect of tax collection and administration on non-residents, which, to a certain extent , helps reduce the uncertainties surrounding the tax treatment of those issues. The National People's Congress finally adopted an amendment to the Individual Income Tax (IIT) law, which raises the standard monthly deduction from RMB 2,000 to RMB 3,500. Certain Corporate Income Tax (CIT) practical issues such as interest deduction on inter-company loans, deductibility of expenses with supporting documentation pending have also been clarified. To help corporations keep track of these changes and take the necessary action on a timely basis, we set out below a 2011 mid-year China tax checklist.