On 10 November 2017, at a China-US economic cooperation meeting, Mr. Zhu Guangyao, deputy minister of finance, highlighted the following:
On November 16 2017, Mr. Fan Yifei, deputy governor of the People's Bank of China (“PBOC”), made a speech at the 6th China Payment and Clearing Forum. Mr. Fan noted that China will encourage foreign companies to participate in the development of Chinese e-payment services. Under the existing rules, for provision of payment services, a “Payment Business License is required. One of requirements to obtain the license is that the applicant must be a limited liability company registered within China. This restricted the ability of foreign investors to get the license, and this requirement may be relaxed.
On 17 November 2017, the PBOC, along with the China Banking Regulatory Commission (“CBRC”), the China Securities Regulatory Commission (“CSRC”), the China Insurance Regulatory Commission (“CIRC”) and the State Administration of Foreign Exchange (“SAFE”), jointly issued the Draft Guidance on Asset Management Business of Financial Institutions (“the Draft Guidance”) to solicit public comments before 16 December 2017. The Draft Guidance aims to provide a sound and healthy regulatory environment for the development of asset management business. The key features of the Draft Guidance are as follows:
In June 2017, the MOF (Ministry of Finance) and SAT (State Administration of Taxation) issued circular Cai Shui  No. 56 (“Circular 56”) and clarified the definition of asset management products from a tax perspective:
Circular 56 also clarifies that, from 1 January 2018, the simplified VAT method will temporarily be applied to the supply of asset management products at a VAT rate of 3%. It will remain to be seen whether the simplified VAT method would still apply if the asset management business/products fall under the Draft Guidance definition scope, but are beyond the Circular 56 scope.
* With regard to the VAT policies for asset management products and their impact on businesses, please refer to the following KPMG China Tax Alerts:
On 30 October 2017, The Technical Committee on Customs Valuation of the World Customs Organization (“WCO Valuation Committee”) released an important case study (case study 14.2). This illustrates a scenario where Customs take into account transfer pricing information in the course of verifying the Customs value. This is the second case study to be issued by the WCO Valuation Committee on this topic, following Case Study 14.1 in 2016. It is worth noting that this is the first time that WCO has adopted a case from the PRC Customs and this particular “China Solution” has thus become part of the global customs valuation guidelines.
The WCO Valuation Committee has been discussing the relationship between Customs valuation and transfer pricing over the past few years. The WCO Valuation Committee confirmed the principle that business documentation developed for transfer pricing purposes may contain useful information for Customs. However, the use of a transfer pricing study as a possible basis for examining the circumstances of a sale should be considered on a case by case basis.
The new case study provides an example of Customs making use of transfer pricing information based on the resale price method. Customs conclude that, in this particular case, the declared import price was not settled using a pricing basis consistent with industry practice and had been influenced by the relationship between the buyer and seller. Therefore, the Customs value should be determined by applying the alternative appraisal methods in sequence (i.e., application of appraisal methods shall be based on the order set out in Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994).
* For more details on the case study, please refer to the following KPMG publication: