(Announcement [2014] No.51) (关于出口货物劳务退(免)税管理有关问题的公告)

To improve the tax refund and exemption administration for exportation, SAT released Announcement [2014] No.51 (“Announcement 51”) on August 28, 2014, which came into effect on the same day.

Announcement 51’s main highlights are as follows:

  • Announcement 51 re-categorizes export companies that must provide foreign exchange receipt certificates to the tax authorities for tax refund and exemption purposes into five categories (SAT Announcement [2013] No.30 ruled nine categories): 
    • Type C companies as classified by the foreign exchange authorities.
    • Types C and D companies as classified by the customs authorities.
    • Companies with credit rating D for tax payment assessed by the tax authorities.
    • Export companies that declare falsified reasons to the tax authorities for uncollectible foreign exchange.
    • Export companies that give the tax authorities forged documents related to receiving foreign exchange.
  • Under the relevant VAT  reform regulation,  to  apply for tax refunds and exemptions, companies providing zero-rated R&D and design services abroad must provide receipt certificates proving that the income for the services is received from the pertinent overseas service recipients. 

However, for multinational companies approved by the foreign exchange authorities to implement centralized fund management for foreign exchange, within the approval period, instead of providing the abovementioned documents, the group’s service-providing entity can provide the tax authority with the receipt certificates issued by the bank to the group’s centralized fund management entity, if the following conditions are met:

  • The payer entity is the overseas entity that signs the R&D or design service contracts with the service-providing entity, or the payer entity is an overseas entity appointed in the R&D or design service contracts to make this payment.
  • The payee entity or the payee shown in the postscript on the receipt certificates specifies the name of the service-providing entity.

Date of issue: August 28, 2014. Date of effectiveness: August 28, 2014.