Time for a compliance check – The clean-up of local tax and fiscal preferential policies
In order to follow the principle of the Third Plenary Session of the 18th Central Committee of the Communist Party of China (CPC) (the Third Plenum), the State Council and Ministry of Finance (MOF) respectively released circulars Guofa  No.62 and Caiyu  No.415 in November and December 2014, urging various local governments to clean-up and standardise local tax and fiscal incentives.
The clean-up timeframe is tight but we have already noticed local finance bureaus in some areas have already tightened up or even suspended the approval of fiscal incentives. We anticipate that more and more local fiscal and tax authorities will take immediate actions to address the clean-up in a timely manner. Additionally, according to the circulars, some enterprises may even face the risk of not being able to enjoy certain incentives under the current tax and fiscal preferential policies after the clean-up. We suggest enterprises to review and re-assess their validity under the new regulations, actively discuss with the in-charge authorities and plan ahead for the changes.
Other issues of China Tax/Business News Flash Visit our Tax Library.