A news posting on the website of the State Administration of Taxation (SAT) has detailed a speech made by Mr. Wang Jun, Director of the SAT, at the “Belt and Road” Forum, held in Beijing on 14 and 15 May 2017. In his speech he recapped on the measures taken so far by the SAT to strengthen tax cooperation amongst countries along the Belt and Road. He also further elaborated on the SAT’s future plans to better serve the Belt and Road initiative, already set out in some detail in Shui Zong Fa  No. 42 (Circular No. 42) of 24 April 2017. See KPMG China Tax Weekly Update (Issue 18, May 2017) for details.
In terms of the existing steps taken by the SAT, Mr. Wang noted that:
(i). China’s tax treaty network, with 106 agreements, already covers almost all the Belt and Road countries, with 54 relevant treaties;
(ii). China’s tax policymakers have developed various tax measures specifically to serve the Belt and Road;
(iii). A series of 59 investment tax guides have been developed to assist ‘going out’ companies, and all Belt and Road countries will be covered by end 2017;
(iv). China has assigned a number of tax officials to various countries (including Belt and Road countries) and international organisations to drive collaboration;
(v). Together with the OECD, China has set up a multilateral tax centre in Yangzhou (announced March 2016). This is the first established in a non-OECD country. It has already provided 14 training sessions to nearly 300 tax officials from developing countries along the Belt and Road.
Building on the policy plans set out in Circular No. 42, Mr. Wang set out further details of planned China initiatives as well as aspirations for measures to be taken by Belt and Road countries, both unilaterally and through agreements with China and other Belt and Road countries:
Mr. John Veihmeyer and Mr. Honson To, Chairman of KPMG International and Chairman of KPMG China respectively, both participated in the Belt and Road Forum and Mr. John Veihmeyer were interviewed by CCTV 2 and Bloomberg. You may click the following links for more:
As highlighted in KPMG China Tax Weekly Update (Issue 19, May 2016), (Issue 26, July 2016), and (Issue 11, March 2017), there has been an ongoing program to simplify and consolidate the various business licenses, registrations and permits which new enterprises in China must obtain. This falls under the “three/five licenses into one, one license one code” program, which has been rolled out on a nationwide basis since 1 October 2016. The end result of this work is that the State Administration for Industry and Commerce (SAIC) aims to have a single registration (“multiple licenses into one”) by 1 October 2017.
Since the business licence simplification program began, different provincial and municipal governments have been taking variant approaches. In particular, government authorities in different locations in China have been combining differing numbers of licenses into one (e.g. 6 into 1, 7 into 1 and even 34 into 1). To push ahead with the initiative in a nationally consistent manner the State Council on 12 May 2017 issued Guo Ban Fa  No. 41 (Circular No. 41) with accompanying guidance. This clarifies how the “multiple licenses into one” policy is to be developed beyond the “five licenses into one, one license one code” policy for corporate enterprises and “two licenses into one” policy for sole traders:
As highlighted in KPMG China Tax Weekly Update (Issue 19, May 2016), the executive meeting of the State Council held on 18 May 2016 included various measures on promoting business system reform. This encompassed a further reduction of the instances in which operating pre-approvals are required from various government ministries/agencies prior to the business registration of an enterprise with the Administration of Industry and Commerce.
Subsequently, the State Council on 7 May 2017 issued Guo Fa  No. 32. setting out five situations which will now be governed by post-approvals, in the place of the pre-approvals previously applying. The transition to a post-approvals system means that an enterprise is permitted to first obtain a business license with the Administration of Industry and Commerce and then obtain any necessary special approvals from the relevant authorities (e.g. from the department of health for medical products). These include:
(i). Set up of a pawn shop and its branches – subject to post-approval by administration for commerce at the provincial level;
(ii). Set up of China-foreign joint venture or cooperative printing enterprises. Set up of a wholly-foreign owned enterprise for conducting packaging, decoration and printing businesses – subject to post approval by the press, publication and broadcasting department of the provincial people's government;
(iii). Set up an enterprise that engages in publication printing – subject to post approval by the press, publication and broadcasting department of the provincial people's government;
(iv). Set up of a permanent representative office by a foreign airline – subject to post-approval by the Civil Aviation Administration (CAA);
(v). Production of civil aircrafts (including engines and propellers) that are subject to approval or permission by the CAA.
* In June 2016, the SAIC has issued a Circular to reduces the number of instances in which pre-approval will be needed before business registration. See KPMG China Tax Weekly Update (Issue 27, July 2016) for more details.
As highlighted in KPMG China Tax Weekly Update (Issue 43, November 2016), a Cybersecurity Law was adopted by China’s National People’s Congress (NPC) in November 2016 and it will come into effect from 1 June 2017.
The Cybersecurity Law sets out various security obligations for network products/service providers and network operators. The collection and overseas transmission of a large range of data types, sourced in China, comes under heavy regulation under the new law.* The law sets out particularly demanding requirements for key information infrastructure facilities (KIIFs). The law provides that “any purchase of network products and services by an operator of KIIFs, which may pose a risk to national security, is subject to national security review. The review will be conducted by the Cyberspace Administration of China together with competent departments of the State Council.”
Subsequently, the Cyberspace Administration of China (CAC) on 2 May 2017 released the trial Measures for the Security Review of Network Products and Services (“trial measures”). The trial measures will take effect from 1 June 2017, which clarify, inter alia, that:
* With regard to the system for protection of the security of KIIFs, the Cybersecurity Law provides that “The personal information and key data collected and generated in China by the operators of KIIFs should be stored within China. Information which needs to be provided to overseas parties for business reasons shall be subject to security evaluation. The security evaluation shall be carried out based on the measures that are developed by the Cyberspace Administration of China and the State Council”. In April 2017, the CAC released the draft Measures for the Security Evaluation of Personal Information and Key Data to be Transferred out of China to seek public comments. See KPMG China Tax Weekly Update (Issue 15, April 2017) for more details.
On 2 May 2017, the CAC issued the revised Measures for Internet-based News Information Services (CAC order No. 1, hereinafter referred as to the “revised measures”). The revised measures, which are intended to support the new Cybersecurity Law issued on 7 November 2016, make revisions to the old measures issued in 2005. The changes reflect the rapid development of internet-based news information services in the last decade. The revised measures provide the following:
The revised measures will be in force from 1 June 2017.