On 13 March 2018, the Ministry of Finance (MOF), State Administration of Taxation (SAT) and China Securities Regulatory Commission (CSRC) jointly issued Cai Shui  No. 21 (“Circular 21”), setting out the tax policies for income derived by foreign institutional investors from trading activity in Chinese futures markets (such as crude oil futures).
Circular 21 is effective from the issuance date and clarifies the following:
Circular 21 will also apply to other commodities futures (beyond oil) that may be later approved by the State Council for opening up to foreign investors.
A VAT exemption is granted for bonded deliveries of crude oil futures, transacted through the Shanghai International Energy Exchange (INE). The bonded delivery must occur within a Customs Special Supervision Area or at a bonded supervision premises. In July 2017, the SAT issued Announcement 29, which clarified the administration of the VAT exemption (see KPMG China Tax Weekly Update (Issue 32, August 2017) for details).
On 16 March 2018, the SAT issued Shui Zong Fa  No. 32 (“Circular 32”), setting out the Reference Criterion (V1.0) for the Conversion of Financial Data (the “Reference Criterion”). Circular 32 requires provincial tax authorities to upgrade their online tax filing systems based on the Reference Criterion. Key tasks include:
This is in line with SAT’s Circular 101 which was issued in September 2017. Circular 101 set out 30 measures to simplify tax administration, which committed to implement online tax filing (see KPMG China Tax Weekly Update (Issue 38, September 2017) for details).
On 19 March 2018, the Peoples' Bank of China (PBOC) issued Announcement  No. 7 (“Circular 7”). This sets out the access and regulatory policies for foreign investment in the payment services sector.
Specifically, Circular 7 clarifies:
The introduction of Circular 7 signifies that China is opening the third-party payment sector to foreign investment. This is in line with a speech made by Mr. Fan Yifei, deputy governor of the PBOC in November 2017, that China will encourage foreign companies to participate in the development of Chinese e-payment services (see KPMG China Tax Weekly Update (Issue 45, November 2017) for details).