The State Administration of Taxation Optimizes Issuance of Tax Residency Certificate to Facilitate “Going Global” for Chinese Enterprises and Individuals

CHINATAX In order to better implement the initiative of the “Belt and Road” and carry out “initiative service for the opening-up strategy” stipulated in Program for Deepening the Reform of State and Local Tax Administration System, the State Administration of Taxation (SAT) recently issued Announcement on Matters of Issuing “Chinese Tax Residency Certificate”(the Announcement).

According to relevant person-in-charge of the International Taxation Department of the SAT, with the implementation of China’s “going global” strategy, the Belt and Road Initiative in particular, more and more enterprises and individuals begin to invest and do businesses abroad, and an increasing number of the enterprises and individuals began to apply for Chinese Tax Residency Certificate (TRC) in order to enjoy benefits of the tax treaty. To help these enterprises and individuals better enjoy the preferential treatment, it needs to optimize the already existing provisions.

The Announcement has the three following features:

First, more power has been delegated to lower levels. Delegate the right of issuing the TRC from city-level tax authorities to county-level ones, and streamline materials to be submitted, such as cancellation of the tax clearance certificate.

Second, transaction time has been clarified. Competent tax authorities should issue and seal the TRC by relative person-in-charge or notify the applicant of reasons not issuing the TRC in written form within 10 working days upon acceptance of the application; matters in need of instructions from superior authorities should be concluded within 20 working days upon acceptance of the application.

Third, service-orientation has been highlighted. If the tax authorities of the contracting party have special requirements on the format of the TRC, competent tax authorities should deal with this issue according to relative processes stipulated in the Announcement to ensure good services.

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