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.

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.

The Shanghai Municipality promotes an action plan to facilitate payments for foreigners

The General Office of Shanghai Municipality has released the “Shanghai Action Plan to Further Improve Payment Convenience”, aiming to streamline payment procedures for foreign visitors coming to China.

The expected objectives will concern the following areas:

– Wider acceptance of foreign bank cards at key locations such as restaurants, supermarkets, pharmacies, hospitals, tourist attractions, hotels, transportation centers;

– An increase in the availability of ATMs from which it is possible to withdraw with foreign bank cards and the maintenance of cash payment channels, as well as a greater presence of foreign currency exchange points;

– The optimization of mobile payment services, facilitating the use of payments by “foreign-card bound” on the main local platforms (WeChat Pay, Alipay);

– The simplification of services relating to bank accounts for foreigners, from online appointment for account opening to the provision of multilingual services;

– The creation of dedicated areas in Pudong and Hongqiao airports and in star hotels, where visitors can purchase cards for city transport and exchange currency, receiving local currency even in small denomination;

– Greater communication activity, to promote the new measures to foreigners through the use of guides, promotional videos and dedicated consultancy structures.

The plan proposed by Shanghai is in line with the measures proposed for the entire Chinese national territory. The difficulty of making payments using foreign bank cards represents in fact another barrier, in addition to the linguistic and cultural ones, that visitors arriving in China face, making facilitation in this regard increasingly necessary.

https://www.shanghai.gov.cn/nw12344/20240430/17d55b402ea04e3eadb86983b1850681.html)