19.07.10 09:39 Age: 14 yrs

Supplementary Notice Clarifies Treatment of Non-Residents Under Tax Treaties

The State Administration of Taxation (SAT) of the People’s Republic of China recently published a Supplementary Notice in order to clarify the Measures for the Administration of Non-residents’ Treatment under Tax Treaties. Before this notice, it was unclear which identification papers of fiscal residents were required to be submitted by taxpayers in accordance with Articles 9.1(3) and 12.1(2) of the Measures. Now, the Supplement clearly requires the submission of any papers that were 1) issued as required in Column 27 of Annex 1 and Column 25 of Annex 2 of the GUOSHUIFA [2009] No. 124 document, or 2) issued separately as a Special certificate. Furthermore, the Supplementary Notice clarifies that the reference to “any income on the record that is subject to withholding at the source” in Article 13 does not include any income that is subject to approval under Article 7 of the Measures (that income, in contrast, is subject to withholding at the source in accordance with domestic tax laws). Though these clarifications may seem mundane, they are expected to greatly reduce the confusion for non-residents who are required to file taxes in China.