Business startups in China will embrace new laws and regulations from January 1, 2019. As the largest market in the world by the size of its population, the People's Republic of China is an attractive place for business setup by foreigners. To better improve business environment, the government has put forward many new regulations in the past years. The following are some of the most important regulatory changes that you should be paying attention to in 2019.
Individual Income Tax (IIT) reform
China’s new individual income tax (IIT) law aims to ease the burden for low to mid income earners while taking a tougher stance on foreign workers and high-income groups. It will take full effect January 1, 2019.
From January 1, the remainder of the new tax law will come into force, and include: provisions on special additional deductions, consolidated categories of taxable income, and the 183-day-rule of residency.
Social Insurance
According to the early released Reform Plan on the National and Local Taxation Collection and Management System, beginning January 1, China’s social insurance contributions will be solely levied by China’s tax bureau, instead of the HR bureau.
The better-equipped tax bureau will be in charge of calculating, collecting, and checking companies’ social insurance contributions. The aim is to build a more efficient and unified tax collection and management system to increase China’s capacity to enforce its social insurance regulations, including cracking down on tax evasion and underpayment.
Intellectual Property Protection
Numerous IP-related policies were issued over the past year. Among them is the establishment of a new national-level court under the Supreme People’s Court, which will handle IP appeals across the country from January 1. The court will manage IP disputes in high-tech fields, including matters related to trademarks, patents, and trade secrets.
All accounting departments should note that starting from 2019, an enterprise will have to disclose in detail the accounting information of its IP assets, such as intangible assets, patent rights, trademark rights, and copyrights, as mandated by the Ministry of Finance and National Intellectual Property Administration.
Zero Tariffs on Hong Kong Goods
Additionally, per an agreement released by the Ministry of Commerce, Hong Kong-origin goods imported into mainland China from January 1 will fully enjoy zero tariffs through the enhanced arrangement for rules of origin.
In addition to the existing product-specific rules of origin, a general rule was introduced based on the calculation of the value added to the products in Hong Kong. The move is part of the Guangdong-Hong Kong-Macau Greater Bay Area initiative to promote trade facilitation.
Tannet has established in a dozen of cities in China, such as Beijing, Shanghai, Guangzhou, Shenzhen, Dongguan, Yiwu, Nanchang, Chengdu, Quanzhou, Xiamen, Hainan, Horgos and Hong Kong. In addition, we also maintained closed cooperation with overseas accounting firm and law firm. Should you need assistance in doing business in China, we are glad to help.
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If you have further queries, don’t hesitate to contact Tannet anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512 or 86-755-82143181 or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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