The Ministry of Finance and State Taxation Administration (STA) issued Public Notice  No. 3 on Jan 17, 2020. This is a Public Notice regarding IIT regulation on non-China sourced income (“Public Notice 3”). Public Notice 3 stipulates relevant rules about how to report the non-China sourced income under the new Individual Income Tax (“IIT”) Law, which applies to tax year 2019 and onwards.
With the deadline of the 2019 Annual Tax Reconciliation (ATR) fast approaching, Ernst & Young LLP (EY), EY China and China General Chamber of Commerce- USA (CGCC) held a dedicated webinar “New China Annual Tax Reconciliation (ATR) Filing- impact to overseas companies and individual” on June 25, 2020 for CGCC members and Chinese companies in the United States.
The webinar was moderated by EY Americas China Overseas Investment Network member, people advisory service (PAS) manager Alice Yu, with speakers including EY China PAS partner April Liao, EY China PAS manager Seven Chang. During the webinar, Ms. Liao and Ms. Chang detailed the definition of ATR, who is required to file ATR, how to file ATR, key content of Public Notice 3, ATR case study, etc. With the June 30th deadline fast approaching, Ms. Liao and Ms. Chang also shared common challenges that companies and individuals are currently facing as well as approaches taken in practice. The webinar received wide attention with the active participation of nearly 200 attendees.
The implementation of the new ATR filing brings new challenges to both individuals and companies. Companies that assign employees to work outside of China and individuals receiving non-China sourced income need to become familiar with the contents of the new IIT law, fulfill relevant tax filing and reporting obligations for 2019 before the deadline, set up early planning for future tax years’ ATR filing. Feel free to contact EY professionals for more information and professional advice.
Since 2011, EY Americas China Overseas Investment Network has been focusing on serving Chinese companies in the Americas. EY will continue to share the latest developments on trade, taxation, and other topics closely related to Chinese companies to convey the perseverance and determination of providing the best services to Chinese clients.