Do companies in China need to provide a tax clearance certificate when remitting funds?

To ease foreign exchange controls and simplify the administration of foreign exchange, the State Administration of Foreign Exchange (SAFE) and State Administration of Taxation (SAT) jointly issued the Announcement on Issues Concerning Tax Filings for Outbound Payments under the Services Trade (Announcement No. 40) in July 2013, which came into effect on September 1, 2013. This announcement cancelled the previous requirement to provide a tax clearance certificate when remitting abroad funds greater than US$ 30,000. This applies to service fees, dividends, interest and royalties.

Under this new system, individuals and institutions in China making outbound payments with an equivalent value of more than US$ 50,000 are now only required to conduct record filing with the in-charge local tax bureau. Companies must fill out a filing form and provide valid contracts or other relevant transaction documents (Chinese translation required) to the tax bureau, which will affix a seal to the filing form. Companies will then be able to remit funds outbound by submitting to banks the filing form and relevant transaction documents. In practice, some banks are more flexible than others when handling outbound payments. Verification of the documents and a tax assessment will be conducted within 15 days after the STB receives these documents.