ALA Consulting

On April 26, 2024,China government released “The Tariff Law of the People's Republic of China” which will be effective on December 1 2024. At he same tame, the Customs Tariff Commission of the State Council released “The Attachment of the law the Import and Export Tariffs of the People's Republic of China, which also will take effect on December 1, 2024.
The law has a total of 72 articles in seven chapters. In the law, it especially stipulate that E-commerce platform operators, logistics enterprises and customs declaration enterprises engaged in cross-border e-commerce retail imports, as well as units and individuals who are under the obligation to deduct, collect and pay customs duties as stipulated by laws and administrative regulations, are withholding agents of customs duties.
The law also regulates the setup, adjustment and implementation of the items and rates of customs duties, and improves the rules on tax payable, tax incentives and tariffs levied under special situations.

From Jan 1 2023 to Dec 31 2024, the small and thin profit enterprise in China whose the annual taxable profit is not more than RMB1 Million enjoys a preferential CIT rate 5%. Now the taxable profit not more than RMB1million and RMB3 million enjoys the same preferential CIT rate, i.e. 5%.

However, except for taxable profit, the small and thin profit enterprise should also meet the three conditions at the same time, i.e. not engaged in prohibited industries; have no more than RMB50 million asset; have no more than 300 employees.

Then standard CIT rate is 25%. So 5% is a really preferential rate. Will you consider to split your business into several entities in China to enjoy the rate? Subsidiaries instead of branches doe work.

New stamp duty of PRC has been effective from July 1 2022. Although it is a small tax compared to value-added tax, corporate income tax, individual income tax etc., China tax authority treats stamp duty as “heavy fine on small tax”. So it is worth to raise enough attention on stamp duty from taxpayers including oversea entities and individuals who have tax obligation in China. We summarized some highlights in the new stamp duty tax laws for your reference.

New Stamp Duty Law of PRC Effective from July 1 2022 “Stamp Duty Law of the People's Republic of China” has been effective since July 1 2022. In order to accommodate to the official implementation of the Law, China recently issued a series of regulations (herein referred as “New stamp duty laws” combined with Stamp Duty Law of PRC) including t...

Cyberspace Administration of China just imposed the fine up to RMB8.62 billion for DiDi Global Inc since they violated the “Data Security Law of PRC”, “Cyber Security Law of PRC” and “Personal Information Protection Law of PRC”. Cyberspace Administration of China ascertain there are 16 violation facts which can be summarized as 8 aspects:1) illegally collect 11.96 millions of screenshot in users’ mobile phone photo album; 2) excessive collect 8.323 billions of users’ shear plate and application information; 3) excessive collect 100.07 millions of passenger's face identification information, 53.51 millions of age information, 16.34 millions of professional information, 1.39 millions of mate relationship information, 100.53 millions of home and office address; 4)excessive collect 100.67 millions of exact location information when collecting appraisal from passengers; 5) excessive collect 0.14 millions of education degree and 57.81 millions of ID information of drivers; 6) analyse the 53.98 billions of passengers’ trip intention, 1.54 billions of most stay-in city and 300.04 millions of remote travel information without telling passengers; 7) ask frequently the phone right when passengers use ride sharing service; 8) not state clearly and correctly the processing purpose of personal information.

“The Measures for the Assessment of Outbound Data Transfer Security” (“The Measure”) was just released and will be effective on September 1, 2022. This measure provides the detailed guidelines for the security assessment of outbound data transferring. Especially where China entities transfer their China employees’ personal information to oversea HQ for internal HR management, will they be subject to security assessment of outbound data transferring? You may find answer in the article.

Security Assessment of Outbound Data Transferring in China Cyberspace Administration of China ("CAC") released “the Measures for the Assessment of Outbound Data Transfer Security” (“The Measure”) on July 7, 2022. The measure will be effective on September 1, 2022 and provides the detailed guidelines for the security assessment of outbound data trans...

If you want to start your business in China, recruiting full time employees is not a good way to kick-off the business at initial stage. Except for the regular labor cost including wages and legal social insurance cost , you will also have to bear unexpected risk, for example, lay-off cost for under performance employees, management cost etc. Under this situation, outsourcing your non-core function to a professional agent is and efficient and effective solution.

We are a professional service provider and very familiar to China business environment. We can provide initial set up, bookkeeping, tax, audit, HR and other administration service. We are a trusted service provider and have been served may foreign companies. Our core team members own China certified tax agent, China CPA, ACCA certificates and can work with bilingual language. We belived it is a right decision If you choose to work with us. Please contact us by [email protected] or [email protected]

The Cyberspace Administration of China ("CAC") released “the Measures for the Assessment of Outbound Data Transfer Security” on July 7, 2022. The measure will be effective on September 1, 2022.

The Measure specified the situations in which assessment of outbound data transfer security must be approved by State CAC through CAC at provincial level : 1) cross-border transfer of important data by data processors 2)cross-border transfer of personal information by critical information infrastructure operators or data processors who have processed personal information of more than 1 million persons, 3) cross-border transfer of personal information by data processors who have totally cross border transferred personal information of 100,000 persons or sensitive personal information of more than 10,000 persons since the beginning of last year, and 4) other situations.

However, for internal HR management purposes, China entities normally need to send employee information to HQ outside China. For most foreign companies who have subsidiaries in China, where if the employees is not more than 100,000, normally they do not need to get the approval form State CAC. But enterprises need to identify what is the sensitive personal information since the permitted amount of cross-border transferring is only ten thousand person which much lower than regular personal information.

In China, if you have stayed in cities where there were cases in the last fourteenth days, your travel record will be marked asterisk in wechat mini program “Communication itinerary card”. Then you may have to be quarantined at hotel or home if you travel to another city.

Now China just canceled the asterisk mark on “Communication itinerary card”which means more free flow between cities will be comping. This implies China further released the control on pandemic situation and intends to restore the economic development.

China just issued the “Opinion on Promoting the Development of Individual Pension” on April 21st 2022. The opinion clarified relevant matters on individual pension. The main points are: 1 the pension is born by individuals entirely. 2 Participant can only open or designate one sole pension account to be used for paying the money, collecting the interest, pay IIT etc. 3 the upper limit is RMB12000 per year and will be adjusted accordingly. 3 The participants can draw the pension when they will reach the retirement age, lose the working ability, be abroad for settlement, or meet other conditions described by relevant laws and regulations.

The implement of individual pension system will not increase the company’s cost since it will be borne by employees entirely. The pension can be deducted partly or fully for IIT purpose. So we think it may provide a new incentive way for employers in China to award employees for excellent performance.

From January 2022, High tech small and medium enterprises can enjoy 100% of super deduction for Research and Development expense (R&D) except for the actual deduction on facts. For the intangible asset resulted by the R&D, the 200% of the cost of intangible asset will be amortized before tax.
China also granted 100% of super deduction of R&D for manufacturing enterprises and 75% of super deduction for other enterprises.