China Regulatory Brief: 2015 Tariff Implementation Plan and New Visa Requirements for Short-term Workers

December 22, 2014 Posted by China Briefing Reading Time: 5 minutes

China Launches 2015 Tariff Implementation Plan

On December 12, the Customs Tariff Commission of China’s State Council released the “2015 Tariff Implementation Plan,” which adjusts import and export tariffs levied on certain goods and implements temporary duty rates for products including manufacturing equipment and accessories for optical communication laser devices and automatic wire welding machines. The temporary duty rates, which are lower than the MFN (most-favored-nation-treatment) tariff, are set to boost imports and meet domestic demand.

China also reduced tax rates for environmental protection equipment such as electronic control brakes for electronic cars; ethylene and ferronickel used in the domestic production of energy resources; lipid-lowering active pharmaceutical ingredients; macadamia nuts and other everyday consumer products. The Plan will take effect on January 1, 2015. A complete Chinese version of the updated tariffs can be found here.

China Clarifies New Visa Requirements for Short-term Workers Coming to China

The Ministry of Human Resources and Social Security (MHRSS) and two other relevant departments jointly released the a circular (renshebufa [2014] No.78) further clarifying the visa requirements and applicable visa types for certain short-term workers (employees and contractors) coming to China. According to the Circular, short-term workers coming to work in China for 90 days or less should obtain a Z visa, M visa or F visa depending on their purpose for coming to China. Notably, the Z visa for short-term workers is not renewable upon expiry. Also, the requirements and approval process for the Z visa applications are comparatively more complex and time consuming. The Circular will take effect on January 1, 2015.

China Set to Establish Three New Free Trade Zones

On December 12, Chinese Premier Li Keqiang held an executive meeting of the State Council, which decided to establish three more free trade zones (FTZs) in Guangdong and Fujian province and Tianjin city. Due to its proximity to Hong Kong and Macau, the Guangdong FTZ will be established with a focus on customs clearance and the finance industry. The Fujian FTZ is expected to provide preferential policies for trade with Taiwan, while the Tianjin FTZ will concentrate on financial leasing. China established the first FTZ in Shanghai in September, 2013 and is looking to reduce the “negative list” of the industries still restricted for foreign investment.

China and Switzerland Sign the First Bilateral APA

The Deputy Director of China’s State Administration of Taxation (SAT), Xie Xuezhi recently signed the Bilateral Advance Pricing Arrangement (APA) with Jacques de Watteville, Switzerland’s State Secretary for International Financial Matters. The agreement, which is the first bilateral APA signed between China and Switzerland, is expected to facilitate communication and collaboration among the tax authorities of both countries and enable enterprises to avoid transfer pricing adjustments as well as double taxation risks in two or more tax jurisdictions. According to an APA report released by the SAT, China’s tax authorities signed 85 APAs by December 31, 2012, among which, 56 are unilateral and 29 are bilateral.

The MOF Abolishes and Adjusts Five Administrative Approvals
On December 9, China’s Ministry of Finance (MOF) released the “Announcement on Abolishing and Adjusting Administrative Approvals (Cai Fa [2014] No.9),” which takes immediate effect. The Announcement adjusts pre-approvals of industrial and commercial registration and post-approvals for the establishment of asset evaluation agencies, accounting firms and their branches, as well as for agencies providing accounting and bookkeeping services. Also, three more administrative approvals, including the approval of professional qualification licenses of certified public valuer (CPV), are cancelled.

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