New Foreign Exchange Regulations for Service Trade

By Richard Hoffmann, ECOVIS Beijing China

Domestic institutions and individuals carrying out foreign exchange under service trade will derive benefits from new regulations. The reforms affect the administration of their cross-border activities and aim for facilitating service trade and investment. They will be rolled out on September 1st, 2013.

Main changes will include:

• Approvals for foreign exchange purchases and payments are not necessary anymore and transactions can be handled directly at financial instituitions in the future.
• There will be no need anymore for  document verification of single foreign exchange receipts or payments for amounts equivalent to or less than 50,000USD.
• The conditions for domestic institutions to deposit foreign exchange earnings under service trade overseas will be relaxed.

As for the State of Foreign Exchange’s „Anouncement on Issues Concerning Tax Record-Filling for External Payment under ST“ from July 9th, the submission of tax certificates for making external payment will be abolished as well.  A new much easier tax record-filling-system for external payments will be implemented instead.

The new regulations provide a much higher level of transparancy and convenience to all domestic institutions and individuals involved.