Recent Important Regulation Highlight

published on 7 November 2022 | reading time approx. 3 minutes

First Quarterly Declaration under New Stamp Duty Law

The Chinese Stamp Duty Law has officially come into effect on 1 July 2022 and taxpayers who declare stamp duty on a quarterly basis shall fulfill their first tax filing under new law in October. For taxpayers who declare stamp duty on a periodic basis, it should be noted that a zero declaration is also required even if no taxable documents are signed during the period.

Shanghai Social Security: Employer Portion of Medical Insurance Payment Could be Deferred

Recently, Shanghai issued a Notice to specify that small and medium enterprises in Shanghai can defer the medical insurance payment of employer portion for the period from September to November 2022. The deferred payment shall be paid by 28 February 2023 at latest, with no overdue penalties charged during this period. In addition, the employer’s contribution to medical insurance is reduced by 0.5 percent with effect from 1 October 2022.

Increase Pre-tax Deduction to Support Science and Technology Innovation

According to the recent tax regulation, for the equipment and appliances newly purchased by high-tech enterprises during the period from 1 October 2022 to 31 December 2022, the expenses are allowed to be deducted in full amount in the current year on a one-time basis when calculating taxable income, and a super deduction of 100 percent is further granted. Furthermore, for enterprises that currently enjoy a super deduction for research and development expenses at the ratio of 75 percent, the super deduction ratio is increased to 100 percent from 1 October 2022 to 31 December 2022.

Individuals can Enjoy Individual Income Tax Refund for Real Estate Transactions

Recently, the Ministry of Finance (“MOF”) and the State Taxation Administration (“STA”) issued the Announcement on Individual Income Tax (“IIT”) policy to support individual’s real estate transactions. The Announcement states that from 1 October 2022 to 31 December 2023, taxpayers who sell their own real estate and re-purchase new one within one year after the sale of their current real estate will be eligible for a tax refund for the IIT paid on the sale of their current real estate.

Consumption Tax Levied on E-cigarettes

Recently, the MOF, the General Administration of Customs and the STA jointly issued the Announcement to impose consumption tax on e-cigarettes. The Announcement clarifies that enterprises and individuals who are engaged in manufacture (import) or wholesale of e-cigarettes in China are deemed to be taxpayers of consumption tax. The tax rate is 36 percent for production (import) and 11 percent for wholesale. The Announcement took effect from 1 November 2022.