W I N T E R 2 0 1 3
63
ments that the investor's home country
has with China. The possible reductions
can be seen in the table above.
Procedures and Documents
Required for Remittance
According to the various aforementioned
SAFE publications, the designated
foreign exchange bank must be provided
with the following materials by all
foreign investors in FIEs before giving
its approval to remit annual profits or
dividends abroad:
1. Tax payment certificate and tax
declaration form (those enterprises
enjoying reduced tax treatment
or tax exemption should provide
the documents issued by the local
tax administration departments
evidencing this);
2. An auditor's report issued by an
accountancy firm relating to the
annual profit or dividend for the
relevant years;
3. Decision of the board of directions on
the distribution of profits, dividends,
and bonuses;
4. The Foreign Exchange Registration
Certificate of the particular FIE;
5. The capital verification report in
relation to the FIE issued by an
accountancy firm; and
6. Other materials or documents that
may be required by SAFE on a case-
by-case basis.
As a note, and codified in the
Circular of the State Administration
of Foreign Exchange on Amending
"Circular on Issues concerning Outward
Remittance of Profits, Stock Dividends
and Stock Bonuses Processed by
Designated Foreign Exchange Banks," no
enterprise with foreign investment whose
registered capital has not been fully paid
as provided by the articles of contract
is allowed to remit foreign exchange
profits or stock bonuses abroad. If the
delay in fully paying in registered capital
as provided by the articles of contract
is caused by special reasons, approval
of the former inspection and approval
institutions will be requested. Profits and
stock bonuses distributed in accordance
with the proportion of paid-in registered
capital can be remitted abroad based
on the approval documents issued by
the former inspection and approval
institutions and other documents
specified in the Circular.
Tax Rate on Dividends from Current Tax Treaties
List of Anti-double Taxation Treaties issued by State Administration of Taxation, http://www.chinatax.gov.cn
TAX RATE
COUNTRY/REGION
0%
Georgia (If the beneficial owner holds directly or indirectly
at least 50% of the capital of the company paying the
dividends and the total investment is no less than 2 million)
5%
Kuwait, Mongolia, Mauritius, Slovenia, Jamaica,
Sudan, Laos, South Africa, Croatia, Macedonia,
Seychelles, Serbia, Barbados, Oman, Bahrain,
Saudi Arabia, Brunei, Mexico
5%
Venezuela, Georgia (Investment in the company paying the
(Holds directly 10% of the capital of
dividends is no less than 100,000; 10% of gross dividends
the company paying the dividends)
if the beneficial owner holds directly less than 10% of the
capital of the country paying the dividends)
5%
Algeria, Luxemburg, Korea, Ukraine, Armenia, Iceland,
(Holds directly 25% of the capital of
Lithuania, Latvia, Estonia Ireland, Moldova, Cuba, Trinidad and
the company paying the dividends)
Tobago, Hong Kong, Greece, Singapore (10% of gross dividends
if the beneficial holder owns less than 25% of the capital of
the company paying the dividend)
7%
United Arab Emirates (UAE)
7%
Austria (10% of gross dividends if the beneficial holder
(Holds directly 25% of the capital of
owns less than 25% of the capital of the company paying
the company paying the dividends)
the dividend)
8%
Egypt, Tunisia
10%
United States of America and all other countries or
regions not listed above