State Administration of Foreign Exchange and State Administration of Taxation, Circular on Issues Relevant to the Trial Implementation of Tax Filing for Outbound Payments of Trade in Services

Issued: February 26 2008
Interpreting Authorities: State Administration of Foreign Exchange and State Administration of Taxation

Main Contents: Beginning from April 1 2008, advance tax filing for outbound payments of trade in services shall be implemented in six pilot regions: Tianjin, Shanghai, Jiangsu, Sichuan, Fujian and Hunan. When a domestic institution registered in a pilot region makes an outbound payment of over US$50,000 for its trade in services at a designated foreign exchange bank in the pilot region, it shall first file a record with the competent state tax authority in the jurisdiction on the strength of a photocopy of the relevant contract, and fill in a Tax Filing Form for Outbound Payments of Trade in Services by Domestic Institutions. No filing shall be required for payments of US$50,000 or less (Article 1). Domestic institutions registered in a non-pilot region that make an outbound payment for trade in services at a designated foreign exchange bank in a pilot region, and domestic institutions registered in a pilot region that make an outbound payment for trade in services at a designated foreign exchange bank in a non-pilot region shall handle the matter in accordance with current provisions (Article 6).