China Reforms Foreign Exchange Administration in Goods Trade

July 4, 2012 Posted by China Briefing Reading Time: 2 minutes

Jul. 4 – The relevant Chinese governmental departments have issued an announcement to reform the system for administering foreign exchange with regards to trade in goods, as well as to adjust the relevant export declaration procedure. Along these lines, the information-sharing mechanism between export proceed collections and export tax refunds will also be improved.

The State Administration of Foreign Exchange (SAFE), General Administration of Customs (GAC) and State Administration of Taxation (SAT) jointly issued the “Announcement Regarding Reforming the Goods Trade Foreign Exchange Administration System (SAFE, GAC, SAT Announcement [2012] No. 1, hereinafter referred to as ‘Announcement No. 1’)” on June 27, 2012, which will come into effect on August 1, 2012.

According to Announcement No. 1, as of August 1, 2012, Export Foreign Exchange Proceed Collection Verification Forms (hereinafter referred to as “verification forms”) will be abolished, and enterprises will no longer undertake export earnings verification procedures. Accordingly, both export customs declarations and export tax refunds will be simplified after August 1, 2012. No verification forms will be required when enterprises conduct export customs declarations, nor are they required when enterprises apply for export tax refunds on goods declared for export after August 1, 2012. The tax bureaus will refer to information on the enterprises’ export proceed collection provided by SAFE and verify the enterprise’s export tax refund.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email china@dezshira.com, visit www.dezshira.com, or download the company brochure.

You can stay up to date with the latest business and investment trends across China by subscribing to The China Advantage, our complimentary update service featuring news, commentary, guides, and multimedia resources.

Related Reading

The China Tax Guide (Fifth Edition)
This popular book, fully updated with all recent tax changes and amendments, details all taxes in China affecting businesses and individuals, how to calculate the amounts due, tax registration and filing procedures, tax minimization techniques, and claiming VAT rebates. It also details good financial management techniques, handling negotiations with the tax bureau and annual audit and compliance procedures.