Lately, the Ministry of Finance ("MOF") and the State Administration of Taxation ("SAT") have jointly issued the Law of the People's Republic of China on Urban Maintenance and Construction Tax (Draft for Comment) (the "Draft for Comment") for public comment by November 19, 2018.
Major contents of the Draft for Comment touch upon five aspects, including "taxpayers", "tax base and scope of taxation", "tax rates", "how to deal with special circumstances" and "tax reliefs". The Draft for Comment expressly states that, taxpayers for the urban maintenance and construction tax purpose are entities and individuals that pay value-added tax and consumption tax within the territory of China. A taxpayer is required to pay the tax at a seven-percent rate if it is located in the downtown; otherwise, the tax rate is five percent. Moreover, the Draft for Comment provides for "when the obligation to pay the urban maintenance and construction tax arises", "period for tax payment", "places where tax returns are filed", and other matters concerning the tax collection and administration.