Effective from September 1, 2024, China has introduced key measures to streamline the cross-region relocation process for businesses. The new procedures aim to make tax and regulatory compliance smoother and more efficient during relocations.
Key Measures
Enhanced Information Sharing and GuidanceTax authorities will improve data sharing with market supervision agencies and offer timely guidance via e-tax platforms to support taxpayers through the relocation process.
Expedited Processing of Outstanding Tax MattersDuring relocation, taxpayers can either expedite the resolution of any outstanding tax issues or opt to close these matters with minimal formalities, based on their preference.
Automatic Transfer of Invoicing Information
For businesses using fully digitalised e-invoices, invoicing quota details will be automatically transferred to the new location.
For those using the Golden Tax Device, the system allows for online information updates without needing physical device submission.
Transfer of Risk-Handling Information
For pending low-risk tax matters, current tax authorities will pass relevant risk information to the new location’s tax authorities.
For medium to high-risk matters, current authorities will promptly close these issues before transfer.
Tax Refund Reminders and ProcessingThe tax system will automatically notify taxpayers of any tax refunds due in cases of overpayment. Authorities will process refunds before relocation, or provide guidance on claiming refunds post-relocation if the taxpayer opts to wait.
One-Stop Services in New LocationTax authorities in the taxpayer’s new location will offer comprehensive services to ensure continuity of:
Tax credit ratings
Invoicing quotas
Prepaid tax information
Recoverable tax losses
General VAT payer status
Uncredited input VAT amounts
They will also guide taxpayers in resolving any unresolved tax issues from before the relocation.
Recommended Preparations
Given the variations in local tax authority practices, businesses planning a cross-region relocation should consult with their current tax authorities to understand the detailed implementation procedures. This will help ensure a smooth transition and full compliance with all relocation requirements.
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