The number of pilot free trade zones in China increased to 21, and innovation in tax payment services accelerated

With the launch of pilot free trade zones in Beijing, Hunan and Anhui, the number of pilot free trade zones in China has increased to 21.

In the course of exploring the establishment of pilot free trade zones, various localities have taken the lead and explored their way forward, yielding more than 200 innovative achievements, and many of their experiences have been extended to the whole country. Among them, the tax system, as one of the experimental plots, has repeatedly innovated and accumulated rich results. At the same time, the State Administration of Taxation and the local tax authorities in the pilot trade zones have taken the initiative and provided front-line services to help the pilot free trade zones and contribute to opening up to a higher level.

All 21 ftAs have tax implications

Since the Shanghai PILOT FREE Trade Zone was approved in 2013, China's pilot free trade Zone has expanded in size six times in the past seven years, covering the Beijing-Tianjin-Hebei Region, the Yangtze River Delta, and the eastern, central and western regions in 31 provinces (municipalities and autonomous regions). From one to 21, the pilot FREE trade zones have been rapidly expanded.

In September 2013, the Shanghai Pilot Free Trade Zone was launched. In 2015, Guangdong, Tianjin and Fujian became the second batch of pilot free trade zones. In 2017, seven free trade zones were established in Liaoning, Zhejiang, Henan, Hubei, Chongqing, Sichuan and Shaanxi. Hainan FREE Trade Zone was approved in 2018 and started operation in June 2020 as a free trade port. In 2019, six pilot free trade zones were opened in Jiangsu, Hebei, Heilongjiang, Guangxi, Shandong and Yunnan. In September 2020, the Beijing, Anhui and Hunan pilot free Trade Zones and the zhejiang Pilot Free Trade Zone were approved for expansion.

The reporter noted that tax revenue has played an important role in the pilot free trade zone's innovation path. All the plans for the 21 pilot free trade zones have tax implications, including innovation in tax services, innovation in the tax system and exploration of the tax system. They focus on encouraging investment and helping open China wider to the outside world.

In terms of trade facilitation, the optimization of tax processing procedures, the "single window" for international trade and the acceleration of export tax rebates have become important reforms in many pilot free trade zones.

In terms of tax systems, pilot free trade zones have introduced a number of preferential tax policies, including corporate income tax and individual income tax. In particular, the pilot free trade Zone in Shanghai and the Free trade port in Hainan have innovated their tax systems to encourage investment and promote trade orientation.

In terms of the research and exploration of the tax system, several schemes have mentioned that the tax policy of tax credit for overseas income should be actively studied and improved on the premise that it conforms to the direction of tax reform and international conventions and does not lead to profit transfer and tax base erosion.

Entrusted with the mission of "exploring new ways and accumulating new experience for comprehensively deepening reform and expanding opening up", the pilot free trade zone has not only explored the way for reform, but also become an important force for stabilizing foreign trade and foreign investment. The reporter learned that in the first seven months of this year, more than 3,300 foreign-funded enterprises were set up in the 18 free trade zones. The actual utilization of foreign investment exceeded 90 billion yuan, and the import and export volume reached 2.7 trillion yuan. The re-expansion of the pilot free trade zone in a special context is seen as a signal of China's commitment to reform and opening up.

Zhao Jinping, a researcher at the Counsellors' Office of the State Council's Pilot Free Trade Zone Construction Research Center, believes that pilot free trade zones will become an important carrier and platform to connect the two cycles of China and the world in the future.

"Pilot Field" for the Reform of Innovative Tax System

As a new round of reform and opening up, institutional innovation including taxation is an important part of the pilot free trade zone reform. Over the past few years, the tax system has been committed to attracting investment, opening wider to the outside world, and promoting trade development.

As a pioneer, the PILOT FREE trade Zone has continuously improved the "single window" system of enterprise access, promoted tax payment on non-monetary assets transfer income by stages, tax refund at the port of departure and other tax policy innovations, laying a solid foundation for other pilot free trade zones. In 2019, lingang new district was established and proposed to establish and implement internationally competitive tax systems and policies. The policy that some enterprises can enjoy a preferential 15% corporate income tax rate highlights its policy orientation of encouraging technological innovation and further opening up.

In Hainan free trade port, zero tariff, low tax rate and closed customs operation become its important features. The policies of zero tariff on goods trade, 15% reduction or exemption of corporate income tax for eligible enterprises, and tax exemption and upgrade for offshore islands have laid an important foundation for Hainan to become "a bright banner and an important open door in the new era".

The newly established Pilot free Trade Zone in Beijing features "scientific and technological innovation, open service industry and digital economy". While other pilot free trade zones still focus on developing trade in goods, the Beijing pilot free trade Zone highlights the characteristics of developing trade in services. In terms of taxation, the Beijing Pilot Free Trade Zone will continue to expand the service functions and application fields of the "single window" of international trade, exempt the import of scientific research equipment by r&d institutions in the zone in line with the policy, and explore and study tax policies to encourage technology transfer.

The pilot Free Trade Zone of Henan Province shall grant duty-free access to imported machinery and equipment needed for production by enterprises in the area under special supervision of the Customs. Hunan Pilot Free Trade Zone verified and levied enterprise income tax on qualified cross-border e-commerce retail export enterprises; The import of scientific research equipment by units in the pilot Free Trade Zone of Zhejiang shall be exempted from tax...

In fact, in the past seven years, while the tax system in the pilot free trade zone has been constantly innovated, the pace of tax reform in China has been accelerating. In particular, the implementation of large-scale tax reduction and reduction, the reform of the national and local tax collection and management system, and the deepening of the reform of "strengthening regulation and service" have made "reform and innovation" a common key word in the large and small environment in which the pilot FREE trade zone is located.

We will continue to accelerate the pace of tax service innovation

In the pilot free trade zone's vibrant pilot fields, it is bearing fruit. Tax service innovation is a way to improve the level of tax service nationwide.

In 2018, the State Council issued the Notice on Measures to Support Pilot Free Trade Zones in Deepening Reform and Innovation, allowing pilot free trade Zones to innovate and introduce tax services in line with international practices. The reporter noted that since the establishment of the pilot FREE trade zone, the State Administration of Taxation has introduced a number of service measures, and many of them have been promoted nationwide. Local tax authorities in various pilot free trade zones are also actively innovating, speeding up and improving quality, and implementing a number of new measures for tax payment services. Among the six batches of pilot free trade zones that have been rolled out nationwide in recent years, there are many tax services.

It is understood that today, the financial leasing goods export tax rebate policy once piloted in Tianjin east Xinjiang has been extended to the whole country. The tax payment policy on individual non-monetary assets investment piloted in the Shanghai Pilot Free Trade Zone will be extended to the whole country, and the tax refund policy on the pilot port of Shipment will be extended to several ports. Online registration of general taxpayers has been extended to the whole country, and export tax rebates have been incorporated into the "single window" of international trade in a number of pilot free trade zones. Tax rebates for outbound travelers have also been realized in many places. In addition, all pilot free trade zones have been separated from licenses, laying a solid foundation for the nationwide implementation.

Moreover, pilot free trade zones across the country have been accelerating the pace of innovation in tax payment services. Tax-related businesses in the Pilot Free Trade Zone of Fujian shall be accepted, handled and responded online to the maximum extent. Jiangsu Pilot Free Trade Zone will deepen the reform of "non-in-person examination and approval (service)" and tax payment facilitation. Yunnan Pilot Free Trade Zone expands "Silver tax Interaction" to benefit from...

Li Ping, a researcher with the Institute of Taxation under the State Administration of Taxation, predicted that the PILOT FREE Trade zone would become a test ground for China to explore and accumulate experience for the formation of a new development pattern under the background of "accelerating the formation of a new development pattern with the major domestic circulation as the main body and the mutual promotion of both domestic and international cycles". On this highland of reform and opening up, tax revenue will give full play to its strength, help the path of innovation and boost the door of opening up.