Online Tax Services Launched in the Shanghai FTZ

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SHANGHAI – In yet another pilot reform perhaps someday destined for nationwide implementation, China’s State Administration of Taxation (SAT) has launched a number of innovative tax services in the Shanghai Free Trade Zone (FTZ). In the related “Notice” issued by the SAT, the reforms are described as providing taxpayers with a simplified tax system in terms of both time and costs.

Under the new system, businesses will be able to complete tax registration, manage invoices and apply for electronic invoices via an online system. This is expected to greatly benefit taxpayers using domestic cargo transportation services, warehouse storage services and lifting & material handling services in the Yangshan Free Trade Port Area. Taxpayers will also be able to file their taxes quarterly (rather than monthly, as is standard) and enjoy instant tax returns.

Importantly, the reforms also introduce a system of online credit evaluations to be administered by the SAT. Based on the results of these evaluations, taxpayers will be offered differing services and processing options; for example, taxpayers in Class A will enjoy an increased number of invoices and other incentives, while those in Class D will be faced with disciplinary policies. According to the Notice, the reforms are intended to lay the basis for a more open credit system in China.

Launched in September 2013, the Shanghai FTZ has introduced a wave of reforms concentrated on the finance, e-commerce, and logistics industries, including zero customs duties and import taxes. If deemed successful, the online tax services in the FTZ will likely be implemented nationwide in the short to mid-term future, in keeping with previously observed practice.

The related SAT Notice can be found here (Chinese).

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira 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 China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email china@dezshira.com or visit www.dezshira.com.

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