Regulatory Compliance updates 08/22

Published on August 16, 2022

China: China continued extending extra tariff exclusion against import US commodities

The Tariff Schedule Committee of China formally announce to extend the second and forth extra tariff exclusion once again against import US commodities. The last exclusions were published in Tariff Schedule Committee announcement [2021] No. 9, which expired on June 30,2022. Adapted to the context, Tariff Schedule Committee has decided in accordance with procedures to extend the exclusion period for the above-mentioned commodities. As for the 124 items listed in the Annex, China will continue to suspend retaliatory tariff imposed in response to the US Section 301 Measures from July 1, 2022 to February 15,2023. 

China Customs issued new regulations on tax related voluntary disclosure         

The General Administration of Customs issued Announcement No. 54 of 2022, which updated the rules on voluntary disclosure of tax-related violations, expanded the application of no administrative penalty for enterprises' voluntary disclosure of tax-related violations, continuous release of self-discipline management, and active disclosure of dividends. Compared with Announcement No. 161, the Announcement No. 54 issued this time has been updated to a large extent in terms of the application of non-punishment, the reduction of tax overdue fines, the impact of corporate credit management, etc., and the institutional advantages of "active disclosure" are further revealed. we summarize and briefly comment on the major updates as follows:

  • The application of no administrative penalty. The time limit for voluntary disclosure will be broadened the disclosure could be made to the customs from three months from the date of occurrence of tax-related violations to six months .And do not require the enterprise to eliminate the harmful consequences.
  • Significantly increase the amount of tax not paid, from less than 10% of the amount of tax payable or less than 500 thousand CNY to less than 30% of the amount of tax payable or less than 1 million CNY; Enterprises are not required to take the initiative to eliminate harmful consequences. But compared with Announcement 161, a one-year deadline is set, requiring enterprises to voluntarily disclose to the customs within one year after six months from the date of the occurrence of tax-related violations
  • Exemption of late payment of tax. Enterprise voluntarily reports its tax-related violations to the customs in writing and accepts the customs treatment, if the customs determines that it is voluntarily disclosed without administrative punishment, the enterprise shall apply to the customs for deduction and exemption of overdue fines in accordance with the law. If the regulations are met, the customs will reduce or exempt them.
  • Significantly increase the range of fines that do not affect the credit rating of enterprises, and minimize the impact of administrative penalties on the credit rating of enterprises. The circumstances that are not included in the record of the credit status of the enterprise recognized by the customs are changed from the behavior of warning or administrative penalty of a fine of less than 500 thousand CNY to the behavior of warning or administrative penalty of a fine of less than 1 million CNY
  • In addition, the management measures of advanced certified enterprises will not be affected during the period when enterprises actively disclose tax-related violations so as to fully protect the rights and interests of AEO advanced certified enterprises.

EU Commission seeks views on upcoming EU customs reform

The European Commission published a public consultation and call for evidence to seek views from citizens and stakeholders on the upcoming reform of the EU Customs Union, which will be proposed by the end of 2022. This reform will have a wide and deep impact on the safety of goods in our Single Market, the protection of EU requirements in all policy areas, regional and global supply-chains, and, crucially, EU crisis-management and security. Recent shocks such as Russia’s aggression in Ukraine, the COVID-19 pandemic and Brexit have highlighted customs’ critical role in ensuring resilient and secure international supply chains, while continuing to uphold the EU’s core values. Customs also has an important role in the EU’s post-COVID recovery, as a key source of public revenue and a potential guardian of the EU’s agenda for strategic autonomy. 

The European Union wins WTO case against Turkey

In a case submitted by the European Union against discriminatory practices of Turkey in the Pharmaceutical Industry, the World Trade Organization found Turkey guilty of discrimination against foreign producers. The verdict says that Turkey violated its WTO commitments under Article 25 of the WTO Dispute Settlement Understanding (DSU) by requiring foreign pharma companies to move their production to Turkey to be eligible for reimbursement under various schemes. The WTO panel noted that Turkey should not prioritize reimbursement reviews and marketing applications of domestic pharmaceuticals over foreign ones. They have asked Turkey to remove its localization and prioritization measures immediately or within a period negotiated with the EU or fixed by a WTO arbitrator. 

India extends Customs clearances beyond normal working hours in Inland Container Depot(s)-reg.

As a measure of trade facilitation and the ease of doing business, the CBIC has been enabling the facility of 24x7 Customs clearance across numerous sea ports and air cargo complexes across the country. Presently, this facility is available at 20 sea ports and 17 airports. Board is in receipt of representations from the trade for extension of the facility of 24x7 Customs clearance to ICDs across the country, so as to cater to the requirements of the trade. The matter has been duly examined. Since the requirements from members of the trade and the local circumstances may vary from place to place, Board hereby advises all the Pr. Chief / Chief Commissioners, having jurisdictions over Inland Container Depots (ICDs) to consider having the ICDs within their jurisdictions designated with extended facility of Customs clearance beyond normal working hours in any of the following ways, namely :- (a)The facility of Customs clearance may be made available on a 24x7 basis, similar to the current Board guidelines for Sea Ports and Air Cargos/Airports;(b)The facility of Customs clearance may be extended on all seven (7) days of the week (including holidays), with stipulated timings (say from 9 :30 AM to 6 :00 PM). 

Singapore amends Strategic Goods Control List

Singapore Customs authority has updated the Strategic Goods control list as on August 1, 2022. Singapore has modified the strategic goods control list as well as the list of items requiring mandatory transhipment and transit permits under the fourth and fifth schedules of the strategic goods. The changes will take effect on October 1, 2022. The Customs authority has amended the fourth and fifth schedules of the Strategic Goods (Control) Regulations (SGCR) by introducing new controls. This regulation's Annex A contains a few more category codes. Strategic goods permits are also required if the goods being transshipped or brought in transit are not listed in the SGCR's fourth and fifth schedules but are known, suspected, or are likely to be used for or in connection with the production or development of weapons of mass destruction in whole or in part. 

South Africa: Taxing of Alcohol Powder Products

The current excise duty regime applies a flat excise rate of 34.7c/kg for traditional African beer powder. As there are similar products on the market, and in the interest of equity, these alcohol powder products will be included in the tax net with an excise rate equivalent to that of the traditional African beer powder from 1 October 2022. In terms of the National Treasury’s proposal, alcohol powder products classified as preparations for use in the manufacturing of alcoholic beverages will be taxed. 

South Africa: New feature on the SARS Online Query System

You can now request a Notice of Assessment and Statement of Accounts via the SARS Online Query System (SOQS). No need to go to a branch to do any of the following:

  • Request the registration of a new Trust for the purposes of Income Tax.
  • Verify a Tax Compliance Status here. This query allows institutions permitted by the taxpayer to verify the taxpayer’s TCS. For the third party to be able to verify, he/she must have the taxpayer’s reference number and the TCS Pin.
  • Request your Tax Compliance Status (TCS).
  • Submit supporting documents.
  • Submit a payment allocation.
  • Request your Tax Reference Number if you have forgotten it.
  • Report new Estate Case. See the supporting documents required to report a new estate case.
  • Conveyancers can submit required supporting documents for Transfer Duty bank detail changes.
  • Updating of the registered representative of a taxpayer for Income Tax, PAYE and VAT.

The request must be completed by the registered representative. Click here to update the registered representative. 

South Africa: Suspension of industrial action at SARS

The South African Revenue Service (SARS) welcomes the suspension of the industrial action by two recognized labour unions, PSA and NEHAWU. The PSA was the first officially to suspend the industrial action from 20 July 2022, followed by NEHAWU on 08 August 2022. In light of this announcement by the two unions, striking employees are back at work and SARS operations, including trade facilitation at our borders, is continuing as usual. The suspension of the industrial action affords all parties the opportunity to work towards progressing the negotiations and related discussions towards settling the dispute.  In this regard, a follow-up discussion as well as the National Bargaining process will be scheduled soon to continue the engagements. 

UK: 3,500 businesses risk losing the ability to import goods

HM Revenue and Customs (HMRC) is reminding businesses that they must use the Customs Declaration Service for import declarations from 1 October 2022. More than 3,500 businesses risk significant delays to importing goods if they don’t move to the UK’s new streamlined customs system now. Businesses submitting import declarations must use the Customs Declaration Service from 1 October 2022, when the Customs Handling Import and Export Freight (CHIEF) system will close for import declarations. 

United States: CBP to increase user fees for fiscal year 2023

U.S. Customs & Border Protection (CBP) posted notice to increase(s) in user fees, which are effective October 1, 2022. CBP will increase Consolidated Omnibus Budget Reconciliation Act (COBRA) ‘User Fees’ by 18.629 per­cent to adjust for inflation in fiscal year 2023. Affected user fees include the Mer­chandise Processing Fee (MPF, with changes only in the Minimum & Maximum rates), as well as truck, rail and vessel arrival fees. Fee increases are mandated by the Fixing America’s Surface Transportation Act, passed in 2015, requiring CBP to make necessary inflation adjustments and fee limitations.