China Regulatory Brief: China-Sri Lanka FTA and Regulations on Housing Leasing Sector

May 9, 2016 Posted by China Briefing Reading Time: 4 minutes

The State Council Decides to Develop the Housing Leasing Industry

On May 4, Li Keqiang headed a State Council meeting deciding to implement a specialized supervision effort to promote and expand private investment into China’s rental market, as well as to encourage deeper integration between the manufacture sector and the internet. The State Council has also determined to define the measures to develop the residential leasing market and expanding new urbanization in order to meet the demands of the people, and to promote development of the aviation industry.

In particular, four specific measures to support the development of the housing leasing market were put forward during the meeting, including: supporting the use of the built housing or newly built housing for carrying out the leasing business; encouraging individuals to lease self-owned housing and convert the commercial housing into leasing housing; promoting monetization of public leasing housing; improving the preferential tax policies; and introducing the unified model texts of the housing leasing agreements, etc.

Business Tax to VAT Reform Policies Concerning Labor Dispatch Fee and Toll Charges Clarified

On April 30, the Ministry of Finance and State Administration of Taxation issued the “Notice on Further Clarifying Policies Concerning Labor Dispatch Fee and Toll Charge Deduction Following the Business Tax to VAT Reform,” which came into effect as of May 1, 2016. The Notice clarifies the implementation standard of the labor dispatch service policy, toll charge deduction and collection policy as well as the human resource outsourcing service and operating leasing policy, etc. for both general taxpayers and small scale taxpayers engaging in dispatch services during the transition period of the business tax to VAT reform. By labor dispatch services, the notice means sending employees to work units or those who receive work unit management for such services in order to meet various kinds of flexible labor.

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China Releases New Tax Policies Concerning the Financial Industry

On April 29, the Ministry of Finance and State Administration of Taxation issued the “Notice on Further Clarifying the Policies Concerning the Financial Industry Following Comprehensive Implementation of the Business Tax to VAT Reform,” which came into effect as of May 1, 2016. According to the Notice, the simple taxation method of three percent may be adopted for calculating and paying VAT for income derived by rural credit unions, village banks, rural fund cooperatives, loan companies which are wholly funded by banking institutions, rural cooperative banks and rural commercial banks whose corporate institution is located in regions at the county level (county level city, district and banner).

China and Sri Lanka to Discuss FTA Signing in June

On May 2, the Sri Lankan Ministry of Industry and Commerce announced that Sri Lanka and China will hold high level discussions on the possibility of signing a bilateral free trade agreement (FTA) in June this year. Total trade between the two countries reached US$4 billion in 2015 for the first time, up 17 percent on the previous year. However, the majority of this trade, 93 percent, was China’s exports to Sri Lanka, consisting mainly of iron and steel, fibers and fabrics, and fertilizer, while Sri Lankan exports to China are minimal. Talks of an FTA between the two countries started in 2014, with suggestions that Sri Lanka’s considerable garment and textiles industry would receive the most benefits of an agreement.

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