Since 1 July 2016, a Water Resource Tax pilot program was initiated in Hebei province. This replaced the prior water resource fees with a tax levied on a volume basis. The tax covers both surface water and underground water (see KPMG China Tax Alert (Issue 18, June 2016) for more details).
On 24 November 2017, the Ministry of Finance (MOF), State Administration of Taxation (SAT) and Ministry of Water Resources (MWR) jointly issued Cai Shui  No. 80 (“Circular 80”). Effective from 1 December 2017, the pilot reform will be extended to 9 additional provinces and municipalities, including Beijing, Tianjin, Shanxi, Inner Mongolia, Shandong, Henan, Sichuan, Shaanxi and Ningxia.
Circular 80 clarifies the following:
* With regard to the Resource Tax reform, please refer to KPMG China Tax Weekly Update (Issue 46, November 2017) for more details.
In a bid to encourage Chinese enterprises to embark on overseas contracting projects under the Belt and Road Initiative (BRI), on 29 November 2017, the SAT issued Announcement  No. 41. This clarifies certain issues for claiming foreign tax credit (FTC) for overseas contracting projects. Announcement 41 applies to corporate income tax (CIT) filings from (and including) 2017 onwards.
In particular, Announcement 41 clarifies the following:
A posting on the SAT’s official website indicated that a special office was recently set up by SAT in Beijing to:
The special office is solely responsible of state/local tax bureaus located in Beijing, Tianjin, Hebei, Shanxi and Inner Mongolia. It aims to reinforce the supervision of tax enforcement and further improve the business and tax environment for taxpayers.
On 30 November, the OECD released additional guidance on the implementation of Country-by-Country (CbC) Reporting (BEPS Action 13). This is the sixth set of CBC guidance provided by the OECD [See KPMG China Tax Weekly Update (Issue 36, September 2017), (Issue 29, July 2017) ,(Issue 16, April 2017), (Issue 48, December 2016) and (Issue 41, November 2016) for the previous five rounds of CBC guidance issued by the OECD].
The additional guidance addresses a number of specific issues:
* SAT Announcement  No. 42, issued in July 2016, provides China’s CBC reporting administrative guidance. See the KPMG China Tax Alert below:
Since 16 June 2017, the Ministry of Public Security (MPS) commenced issuance of new “Foreign Permanent Resident ID Cards” (PR ID cards) to foreign nationals. This follows the foreign nationals permanent resident system reform. The MPS will stop issuing the existing “Foreigner’s Permanent Resident Card”.
On 29 November 2019, the State Administration of Foreign Exchange (SAFE) issued Hui Zong Fa  No. 59, which clarifies that PR ID cards can be used for forex remittance settlement or forex purchase purposes. This means that a foreigner can more readily convert RMB to (say) USD on remittance out of China or purchase USD (with RMB) that they leave in China. A foreigner who holds a PR ID card, may deal with banks directly to settle forex remittance transactions, or purchase foreign currencies, where the total transaction value is within the annual quota (i.e, US$50,000). No SAFE approval is required.
* To attract highly skilled overseas workers, China has introduced a string of measures on the administration of exit and entry of foreigners from China. On March 13 2017, the Ministry of Human Resources and Social Security promulgated Order No.32, which streamlines the requirements for Chinese employers to obtain work visas (Z-visas) for foreign employees (see KPMG China Tax Alert Issue 12, May 2017 for more details).