On 10 April 2018, the State Administration of Taxation (SAT) issued Announcement  No. 15 (“Announcement 15”). This simplifies the reporting requirements, which were stated in SAT Announcement  No. 25 (“Announcement 25”), for declaration of asset losses for corporate income tax (CIT) purposes.
Announcement 15 applies from the 2017 CIT annual filing (i.e., in May 2018) onwards and clarifies that:
At the Boao Forum for Asia Annual Conference held on 10 April 2018, President Xi Jinping pledged that China will further open up its economy, with revision of the “negative list” for foreign investment planned by June 2018 (see KPMG China Tax Weekly Update (Issue 15, April 2018) for other measures).
On 17 April 2018, the National Development and Reform Commission (NDRC) set out the direction of the revision:
The existing 2017 negative list for FTZs (issued on 5 June 2017) provides an overview of the sectors in which foreign investment is permitted (including subject to pre-approval where controlling stakes must be held by a Chinese party) or prohibited in FTZs. These include sectors such as metal ore and non-metallic mineral mining, aviation manufacturing, ship building, automobile manufacturing, rail transportation equipment manufacturing, communications equipment manufacturing, mineral smelting and calendaring, pharmaceutical manufacturing, road transport, water transport , internet and related services, banking services, insurance business, accounting and auditing, statistics and survey, education, press and publication, radio and television, financial information, culture and entertainment (see KPMG China Tax Weekly Update (Issue 25, June 2017) for details).
On 28 June 2017, the NDRC and the Ministry of Commerce (“MOFCOM”) jointly issued the Catalogue of Industries for Guiding Foreign Investment (2017 revisions) (the “2017 Catalogue”). The layout of the Catalogue has been realigned to conform with the new “negative list” system. This covers the restricted and prohibited industries, as well as the encouraged industries for which special requirements exist (e.g. requirements for Chinese business partner equity participation in the invested enterprise, requirement for local Chinese senior executives). This allows for simple MOFCOM recordals to be made for investments in industries where foreign investment is encouraged or permitted, with pre-approvals limited to industries where investment is restricted (see KPMG China Tax Alert (Issue 21, June 2017) for details).