August 2017
Supplementary Circular of the Ministry of Finance and the State Administration of Taxation on Issues Arising From Value-added Tax Policies for Asset Management Products(Mainland China)
2017.01.06
James Cheng
The Ministry of Finance and the State Administration of Taxation issued the Supplemental Circular on Issues Arising From Value-added Tax Policies for Asset Management Products (Cai Shui [20170 No. 2) ( the "Circular") on January 6, 2017. The Circular is intended to provide a supplemental notice regarding how the "asset product manager shall be deemed the taxpayer for any value-added tax incurred during the operation of asset management products" under Article 4 of the Circular of the State Administration on Taxation on Clarifying the Value-added Tax Policy on Finance, Real Estate Development, Educational Support Services and Others (Cai Shui [2016] No. 140).
According to the Circular, if value-added tax is incurred during the operation of asset management products on or after July 1, 2017, the value-added tax shall be paid by the asset product manager pursuant to the current rules. For any act that incurs value-added tax in the course of operation before July 1, 2017 and the value-added tax is not yet paid, it no longer has to be paid; if it was paid, then the tax may be offset against the value-added tax payable by the asset product manager for the following month.
The specific administrative measures for the collection of value-added taxes incurred during the operation of asset management products will be separately prescribed by the State Administration of Taxation. The Notice will come into effect on July 1, 2017.
James Cheng
The Ministry of Finance and the State Administration of Taxation issued the Supplemental Circular on Issues Arising From Value-added Tax Policies for Asset Management Products (Cai Shui [20170 No. 2) ( the "Circular") on January 6, 2017. The Circular is intended to provide a supplemental notice regarding how the "asset product manager shall be deemed the taxpayer for any value-added tax incurred during the operation of asset management products" under Article 4 of the Circular of the State Administration on Taxation on Clarifying the Value-added Tax Policy on Finance, Real Estate Development, Educational Support Services and Others (Cai Shui [2016] No. 140).
According to the Circular, if value-added tax is incurred during the operation of asset management products on or after July 1, 2017, the value-added tax shall be paid by the asset product manager pursuant to the current rules. For any act that incurs value-added tax in the course of operation before July 1, 2017 and the value-added tax is not yet paid, it no longer has to be paid; if it was paid, then the tax may be offset against the value-added tax payable by the asset product manager for the following month.
The specific administrative measures for the collection of value-added taxes incurred during the operation of asset management products will be separately prescribed by the State Administration of Taxation. The Notice will come into effect on July 1, 2017.
