New Italy-China Double Taxation Agreement soon in force

On 5 November 2024, the Italian Chamber of Deputies approved the bill for the ratification and execution of the Double Taxation Agreement (DTA) signed in 2019 between the governments of the Italian Republic and the People’s Republic of China regarding income taxes double taxation and the prevention of tax evasion and avoidance. With the Meloni government taking office in October 2022, the bill had to obtain a new approval by the Italian Council of Ministers, and subsequently underwent Parliament discussion. The Agreement will enter into force following the exchange of ratification instruments between the contracting countries, expected by 1 January 2025.

The 2019 Agreement updates the previous DTA signed on 31 October 1986, adapting the latter to the OECD/G20 BEPS Project.

Among the revisions, Article 10 provides for a reduced withholding tax rate from 10% to 5% in relation to dividends from investments participated for at least 25% of the capital, and continuously for 365 days.

Article 11 regulates interests, providing for a reduction to 8% for interests paid to financial institutions for 3 years minimum duration loans aimed at investment projects.

Finally, Article 12 confirms a standard rate at 10% for royalties, with a reduction to 5% for royalties on industrial, commercial or scientific equipment.

Yesterday, 6 November, the meeting “Shanghai and Jiaxing: a New Opportunity” was held as part of the CIIE currently underway in Shanghai at the National Exhibition and Convention Center, a new opportunity for exchange and dialogue between entities linked by common views.

Sponsored by Nanhu District, located in the Chinese city of Jiaxing, China-Italy Chamber of Commerce, Intesa Sanpaolo Bank, Dragon Bridge Investment, and CPO, the event saw the participation, in addition to representatives of the sponsors, of some representatives of Italian companies present in China. The theme of the meeting, a follow-up to the event held last 5 September in Milan with the participation of a delegation from Jiaxing, was the presentation of Nanhu District as an ideal investment hub for foreign players seeking a strategic positioning within the Chinese market.

Despite the ongoing conflicts over state subsidies and other trade-related issues between the European Union and the People’s Republic of China, in 2024 Beijing proved his willingness to foster and improve its trade relations with many European countries. Among them, Spain has been active in recent years towards strengthening the bilateral exchanges with China, as proved last month when Spanish Prime Minister Pedro Sánchez hold an official visit in the Asian country on 8-11 September.

As China’s fifth-largest trading partner within the EU, Spain has all the interest in promoting mutual openness in the trade environment between the two countries, with a total trade volume that in 2023 reached USD 48.58 billion. The economic ties were strengthened during recent years with a series of agreements, among which a Bilateral Investment Treaty (BIT) in force since 2008, a Double Tax Avoidance Agreement (DTA) in force since 2021, and a Social Insurance Agreement, effective since 2018 , this latter is an agreement that for example other European Nations, as Italy, do not have with China. One of the purposes of Sánchez’s visit was to reinforce mutual investments in a different variety of sectors: in this direction goes the deal, announced by the Spanish delegation and worth one billion dollars, signed with the Chinese Envision Group to build a new hydrogen equipment factory in Spain.

Join Us at CIIE 2024 in Shanghai!

We are pleased to inform you that CPO & Partners will be attending the China International Import Expo (CIIE) from November 5th to 10th, 2024, at the National Exhibition and Convention Center, Shanghai.

As one of the largest import expos in the world, CIIE provides a unique platform for global businesses, and we are eager to connect with companies looking to expand in China, Italy, and beyond. Our team of experts will be available at the Trade in Services section, booth 8.2C5-07, to discuss how we can assist your company’s international growth.

Don’t miss this opportunity to meet us in person and discover more about our tailored tax and legal services.

Save the Date! We look forward to seeing you at CIIE 2024!

On 8 September, the Ministry of Commerce (MOFCOM) of the People’s Republic of China published the Circular No. 568, concerning the establishment of Wholly Foreign-Owned hospitals in selected pilot cities, namely Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen, and the island of Hainan. This move represents a further development in the process of opening up the country’s health sector to foreign investments, following a similar pilot project that in 2014 introduced the possibility of establishing Wholly Foreign-Owned hospitals. However, due to the stringent requirements imposed on them, the 2014 project mainly prompted foreign investors to channel their resources towards setting up hospitals through Joint Ventures and cooperation agreements with Chinese companies. The new Circular, which do not cover the Chinese traditional medicine field and the mergers and acquisitions of public hospitals, could become a great source of attractiveness for investments in a market of increasing importance, considering the healthcare needs of the rapidly aging Chinese population. To evaluate the effective potential of the new Circular it will be necessary to wait for the specific conditions and requirements, which will be announced separately.

From September 20 to 22, 2024, the COOL CAR SHOW is taking place in Hangzhou, a major exhibition focused on the automotive sector, with an emphasis on car customization, electronic components, and vehicle accessories. The event hosts over 60,000 visitors and 1,000 selected exhibitors, creating the perfect environment to explore automotive innovations.

Among the exhibitors, we were pleased to visit the stand of 𝗠𝗼𝘁𝗼𝗿𝗾𝘂𝗮𝗹𝗶𝘁𝘆, one of our clients, who stands out in the vehicle modification and tuning sector.

The event also features ITA/ICE (Italian Trade Agency) among its organizers, further confirming the importance of international collaboration in this field.

Mid-Autumn Festival, Zhongqiu Jie (中秋节) in Chinese,

is also called the Mooncake Festival or the Moon Festival. It was a ceremony during which people worshipped the moon, as a way to give thanks for the harvest and to encourage the “harvest-giving light” to return in the coming year. Today, it is still an occasion for outdoor reunions among friends and relatives to eat mooncakes and watch the moon, a symbol of harmony and unity. Making and sharing mooncakes is one of the hallmark traditions of this festival.

Happy Mid-Autumn Festival from all CPO Staff !

2024 Shanghai Book Fair

The 2024 edition of the Shanghai Book Fair, one of the most important yearly book fairs in Mainland China, organized since 2004, is being held from 14 to 20 August in the heart of Shanghai, hosted again this year at the Shanghai Exhibition Center, the venue of numerous prestigious international and non-international fairs, located directly in front of CPO Shanghai offices.

Offering a vast selection of foreign language books, among the almost 30,000 titles on display, the Fair promotes the interaction between different cultures and languages, presenting itself as a point of reference for anyone who wants, through reading, to begin learning about China or deepen specific interests. Another reason for attraction, perhaps not known to everyone, is the cost of books in China, extremely low, with university texts that for example cost 5-10 euros per book for new editions just printed. For those who happen to be in Shanghai during this period and love reading, visiting the Fair is highly recommended.

China Visa exemption for Italian citizens – No limitations for multiple entries

Regarding the visa exemption for Italian citizens who travel to China for 15 days, valid until 31 December 2025, considering the importance of the policy for those who plan to visit the country for the reasons covered by the exemption, i.e. business, tourism, visiting relatives and friends, and transit, a practical clarification is useful.

The Embassy of the People’s Republic of China in Italy specified how the exemption works in relation to the possibility of multiple entries, requirements for the time interval between each entry, and restrictions on the total cumulative number of days in which one person can stay in China.

Italian citizens who come to China to engage in the activities covered by the exemption are not subject to restrictions on the number of visa-free entries and the total number of days in which they can stay in China. If they wish, they can thus enter multiple times into the country for a period of 15 days for each stay, having the option to leave and re-enter each time by departing from any country or region outside of China.

Travelers to China are advised to keep supporting documents, especially for travelers with numerous entries, such as invitations, airline tickets and hotel reservations in line with the purpose of the visit.

Negotiations between China and Peru for a Treaty to avoid double taxation

At the end of May, the Peruvian Minister of Economy and Finance, José Arista, shared the news that Peru and China completed the first round of negotiations to sign a treaty to avoid double taxation and prevent tax evasion and avoidance. A second round is expected to start in November of this year, which could lead to the final signing and ratification between the parties. The agreement will touch upon the fields of trade in goods and services and of investments, by reaching a greater integration between the respective economies. The planned treaty signals the importance of the Peruvian market for China, considering that the Asian nation is the first destination for Peru’s exports, for an amount of 23 billion dollars in 2023. In recent years, China has also been keen in investing in the country, especially in the mining, energy and transportation sectors. The new agreement will reinforce the legal institutional framework already existing between China and Peru, which signed a Free Trade Agreement in April 2009.