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China Insight - Tax

China Simplifies Foreign Exchange Administration on Non-trade Current Account Items

01/08/2013

Under the current PRC foreign exchange control system, cross-border payments and receipts of non-trade current account items are generally not subject to any approval procedures. I.e. such remittances can be handled directly with banks. However, certain documentation with the handling banks shall be made in order to pay to abroad or use the remittances received from abroad. The documentation requirements vary depending on the nature of the underlying transactions (e.g. services, trademark licensing, dividend distribution and so on).

There are a few exceptions where an approval from the competent local State Administration of Foreign Exchange (“SAFE”) will be necessary. E.g. if the non-trade current account item has not been specified by SAFE regulations, i.e. it belongs to “other non-trade current account items”, SAFE approval shall be obtained for remittances with an amount of above USD 50,000.

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China Insight - Tax
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Authors

Picture of Ulrike Glueck
Dr. Ulrike Glueck
Managing Partner
Shanghai