As of June 2020, businesses with an A or B credit rating can now enjoy streamlined tax services when transferring registered businesses addresses within the Yangtze River Economic Region. The primary benefit of these policies is that businesses can now easily transfer tax information between Shanghai, Jiangsu, Zhejiang, and Anwei, depending on travel time between previous and current addresses. The State Taxation Administration is also creating several new measures in the coming months designed to further modernize tax registration and payment services within the Yangtze River Economic Region. This article will outline the streamlined procedures that businesses must complete when changing a registered business address in the Yangtze River Economic Region, the tax services that businesses may now enjoy when changing location, and the new digital platforms and other benefits that are now available to taxpayers in the region.
In addition to having an A or B credit rating, business should meet the following criteria in order to enjoy these new streamlined tax services:
- Not currently under investigation
- All taxes settled with the home authority
- Invoices and equipment related to tax control have been canceled
- Not actively flagged by the tax control system
Unlike the previous system, in which taxpayers first needed to cancel their tax registration in the previous location before being able to register in the new location, taxpayers can now enjoy automatic transfer between regions, with the procedures being handled internally between relevant tax authorities. Taxpayers should submit the following documents when notifying a tax authority of a change in address:
- Business License issued by the Administration of Industry and Commerce “AIC” in the new business location
- Two copies of a report
- An original ID of either the general manager, legal representative, or chief financial officer to be returned at the end of the review
Businesses that meet the criteria set forth will automatically receive a notice of consent to relocation, at which point they will be assigned a district tax authority according to the local law in the new location. The tax authority will confirm the taxpayer’s information the same day and will inform that taxpayer of the status of their application.
At this point, the taxpayer can logon to their new electronic platform or go in person to the local tax authority to complete the procedures necessary to issue and invoice fapiao in the new location. The taxpayer must also create a deposit account before the end of the current tax declaration period as well as complete a transfer agreement between themselves, the bank, and the local tax authority as required.
As pointed out by government programs promoting the program, if the two locations are physically close enough to permit travel within a day the whole process could theoretically be completed incredibly quickly.
Qualified businesses that conform to these procedures now inherit the following characteristics, after a change in tax authority:
- Basic registration information
- Credit rating
- Taxpayer status
- Fapiao verification and printing equipment
- Special VAT fapiao quota
- Export tax refund tax filing information
Tax Representative Furthermore, businesses may deduct input VAT and other tax deductions incurred in the previous location. Businesses are no longer required to submit an application to the new tax authority in order to transfer these deductions from one location to another. All pre-existing tax obligations will be handled according the local tax law at the new location.
Although many of the procedures outlined above still be completed in person at the local tax bureau, China’s State Taxation Administration (STA) has made it clear that they wish to implement new digital platforms in order to better manage the procedures. Tax collection services, tax control equipment management, input tax credit , and even the actual application process itself will soon be handled exclusively on the tax bureau’s digital platform. The STA has also encouraged tax authorities to utilize emerging technologies like blockchain, 5G, and machine learning to further streamline the overall system of taxation in the Yangtze River Economic Region.
Ultimately, these new, streamlined procedures and incentives provide a singular benefit to investors: savings. Investors who now wish to change locations in the Yangtze River Economic Region will save a considerable amount of money in not having to pay an employee or outside firm to wrestle with the logistics of what previously was a much more complicated process. In addition, firms will also see time savings, as what was previously a multiple week process has been cut down to as short as a day in some cases.