China Publishes New Draft of Foreign Investment LawOn December 26, 2018, the National People’s Congress (NPC) of China published the draft Foreign Investment Law (New Draft), seeking for public opinions. This draft is considered as an updated version based on a draft made by China’s Ministry of Commerce which was published four years ago.
Implementation of Scope Expansion of Deferred Withholding Tax Policy on Distributed Profits Reinvested by Foreign Investors for Direct InvestmentThe Ministry of Finance, the State Administration of Taxation (SAT), the National Development and Reform Committee and the Ministry of Commerce have jointly released Cai Shui (2018) No. 102, Circular on Expanding the Applicable Scope of the Policy of Temporarily Not Levying the Withholding Tax on Distributed Profits Used by Overseas Investors for Direct Investment (Circular 102) to replace the previous Cai Shui (2017) No. 88, Circular on Policy Issues concerning Temporarily Not Levying the Withholding Tax on Distributed Profits Used by Overseas Investors for Direct Investments (Circular 88).
Reduction of Regulating Measures Reveals the Opening-Up Determination of ChinaRespectively on June 28, 2018 and June 30, 2018, the National Development and Reform Commission and Ministry of Commerce jointly issued the Special Administration Measures on Foreign Investment Access (Negative List) (2018 Edition) (hereinafter referred to as the “2018 Negative List”) and the Special Administrative Measures on Foreign Investment Access to Pilot Free Trade Zones (Negative List) (2018 Edition) (hereinafter referred to as the “2018 Negative List of FTZ”), to be implemented respectively on July 28, 2018 and July 30, 2018.
Increased Certainty in the Assessment of Beneficiary Owner: Opportunity for Foreign Investors?The State Administration of Taxation (“SAT”) issued Announcement on Issues Concerning ‘Beneficiary Owners’ in Tax Treaties, SAT  No. 9, effective from April 1, 2018 (“Announcement 9”), which replaced the former Guo Shui Han  No. 601 and SAT  No. 30 by revising the ‘adverse factors’ for the assessment of beneficiary owners (“Assessment”), widening the scope of the ‘safe harbor’ rules, and allowing ‘look through’ for the Assessment with certain conditions, etc. Moreover, the SAT has issued an interpretation to Announcement 9 for further clarifications (“Interpretation”).
China to Remove Foreign Shareholding Restrictions in Certain IndustriesOn April 17, 2018, the National Development and Reform Commission of China (“NDRC”) published on its official website a news release announcing that China will remove foreign shareholding restrictions in automobile, shipbuilding and aircraft manufacturing industries.
The Spanish Ambassador in the People's Republic of China chairs the seminar of Garrigues China to analyze the new agreement on social security between China and SpainDirectors and representatives of the main Spanish companies with presence in the Chinese capital also attended the seminar organized by Garrigues Beijing Office.
Tax China Newsletter - January / February 2018This issue of Tax China Newsletter mainly includes: (1) Certain types of distributed profits re-invested in resident enterprise by overseas investors will enjoy beneficial tax deferral policy (Announcement of the State Administration of Taxation (“SAT”)  No. 3 and Cai Shui  No. 88); (2) The definition of the beneficial owner in tax treaties has been further clarified under Announcement of the SAT  No. 9; (3) Announcement of the SAT  No. 11 has further clarified a number of issues in the implementation of double taxation treaties; (4) The SAT issued the Announcement of the SAT  No.46 regarding the country by country report; and (5) Implementation Regulations of Environmental Protection Tax Law is in effect since January 1, 2018.