China Tax/Business News Flash

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Dec 2015, Issue 49

China releases the blueprint for tax collection and administrative reform - Profound impact to be anticipated on taxpayers

On 13 October 2015, the Plan on Deepening the Reform of Tax Collection and Administration System of State Tax Bureau (STB) and Local Tax Bureau (LTB) (the 'Reform Plan') was deliberated and approved in the 17th session of the Central Leading Team for the Comprehensive Deepening of Reform. On 24 December 2015, the General Offices of the Central Committee of the Communist Party of China and the State Council jointly released the Reform Plan, which sets out the reform objective of "establishing a modern tax collection and administration system by 2020 to be commensurate with China's modernised governance system and governance capability, to lower the tax compliance cost, enhance tax administrative efficiency, improve the level of tax compliance and satisfaction of taxpayers, ensure the effectiveness of tax functions and contribute to the sound development of economy and social fairness".

The Reform Plan comprises of three sections: Overall Requirements, Main Tasks and Implementation. Main Tasks is the longest section which includes 6 aspects and 31 tasks. As the most comprehensive tax administration framework in China since the 'Tax Sharing Reform' ('1994 Reform') was introduced in 1994 to establish two separate tax authorities (i.e. state tax bureau (STB) and local tax bureau (LTB)), the Reform Plan will have significant impact to both the tax authorities and taxpayers as it will serve as the basis for tax administrative reform in the STB and LTB and reference for tax system reform in the years to come. In this Issue of News Flash, we will decipher the key reform trends outlined in the Reform Plan and share with you our observations.

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