China Regulatory Brief: China Commits to Automatic Exchange of Tax Information

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China-Regulatory-Brief
China Commits to Automatic Exchange of Tax Information

Approved by the State Council, China has committed to the Organization for Economic Co-operation and Development’s (OECD’s) global standard for automatic exchange of tax information and will start to automatically exchange information with other countries’ tax authorities by September, 2018. On December 16, China became the 77th jurisdiction to sign the Multilateral Competent Authority Agreement (MCAA), a framework agreement based on the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. Meanwhile, the OECD and China’s State Administration of Taxation (SAT) renewed a cooperation agreement first signed in 2013. This move indicates the country’s determination to combat global tax evasion through heightened international cooperation.

MOF Amends Measures for the Administration of Accounting Books

On December 11, the Ministry of Finance (MOF) issued the revised “Measures for Administration of Accounting Files (the Measures),” which shall become effective as of January 1, 2016. According to the Measures, the retention period for the relevant documents, including contracts, agreements, certificates and accounting books varies for different types of records (usually 10 or 30 years), and certain documents need to be stored permanently. The Measures also further clarified the definition and scope of accounting files, the administration of electronic accounting files and the rules of transferring the files abroad country. This is the first revision being made since 1998.

Professional Service_CB icons_2015RELATED: Tax and Compliance Services
Beijing Releases Implementation Rules of the Trade Union Law

The Beijing municipal government has recently released the “Implementation Rules of the Trade Union Law of the People’s Republic of China,” which will take effect on January 1, 2016. The rules stipulate that companies who have over 25 employees should set up a fundamental trade union. In the case that the company needs to lay off employees, the employer should inform the trade union 30 days in advance. Further, the company is required to fund the trade union based on two percent of the total wages paid to all their employees in last month before the 15th of each month. The employer may not prohibit their employees to join the trade union by means of terminating the labor contract or lowering payment. 

China Further Clarifies Food Safety Law

On December 9, the State Food & Drugs Administration (SFDA) issued the revised draft of the “Implementation Regulations on Food Safety Law” to seek public opinions. Compared to current regulations, a total number of 64 new articles were added, with an emphasis on online food trading. According to the draft, the third party platforms are required to submit their website information and IP address to the SFDA within 30 working days after they start their online business. They also need to display the company information of food producers/retailers who have violated the food safety laws in a prominent place on their website.


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