The Chinese State Council has updated foreign investment negative list applicable to all 11 free-trade zones (FTZs). These special zones offer foreign companies tax concessions and simplified administrative procedures and are particularly attractive for high-end consumer goods, electronics, telecommunications and medical companies who want to expand their business to China.
The gross value of foreign trade to and from these FTZs is growing steadily. In the pilot Shanghai FTZ the proportion of foreign companies nowadays is over 27% and in 2016 the zone reported 73% increase in the number of company registrations.
On 7 June 2017, senior officials and representatives of 67 jurisdictions (including Mainland China, who also represented Hong Kong SAR) gathered in Paris to participate in the signing ceremony for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting or the Multilateral Instrument (MLI). The provisional MLI position for each signing jurisdiction is now published on the website of the Organization for Economic Cooperation and Development (OECD).
In 2014, the Global Forum endorsed the new common reporting standard on automatic exchange of financial account information (AEOI). Jurisdictions that have publicly committed to implementing the AEOI standard on a timeline will first exchange tax information in 2017 or 2018. The Global Forum, in collaboration with the OECD, has been working hard to support these commitments. China (as well as Hong Kong) fall within the jurisdictions undertaking first exchanges in 2018. The first information exchange involving China will occur by September 2018.
Last week Hong Kong lawmakers passed several tax measures announced in the Budget for 2017-18 that are expected to reduce Hong Kong tax revenue by 2 billion HKD.
The following changes have been implemented, commencing from the year of assessment 2017/18: