2024 Tax Trends: Steering Compliance for Efficiency

**I.

Introduction** Amidst the global economic uncertainties and the complexities of domestic and international policy environments, taxpayers have recently faced numerous challenges and opportunities in the field of tax practice.

By integrating recent observations from tax practice in 2024, this article aims to comb through and share hot and key issues in practice, in hopes of providing a reference for corporate tax managers to tackle challenges and seize opportunities.

**II.

Economic Background** According to the International Monetary Fund's (IMF) July release of the "World Economic Outlook" [1], the global economic recovery remains slow, with an expected growth of 3.2% in 2024 and 3.3% in 2025.

In particular, due to the rebound in private consumption in the first quarter and the strengthening of export performance, the IMF has revised China's economic growth forecast for 2024 to 5%.

According to statistical data released by China's Ministry of Finance [2], from January to July 2024, China's cumulative general public budget revenue decreased by 2.6% year-on-year, with tax revenue accounting for more than 81% of the total, amounting to 11.124 trillion yuan.

**III.

"Data-Driven Tax Administration" Becomes a Key Term, New Ideas in Tax Collection and Administration Deserve Attention** On July 5, 2024, Hu Jinglin, the Director of the State Taxation Administration, wrote an article in the Study Times titled "Promoting High-Quality Modernization of Chinese Tax Practice" (hereinafter referred to as "Tax Practice") [3].

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The article points out that in the future, tax authorities will focus more on "data-driven tax administration," fully utilizing modern information technology to promote tax governance towards a more refined, precise, and intelligent modern stage, exploring paths and accumulating experience for the modernization of the tax governance system and capabilities.

1.

Digitalization Aids Precise Tax Management, Corporate Tax Compliance Needs to Adapt to Changes From the perspective of the article "Tax Practice," the work focus advocated by the State Taxation Administration will return more to the essence of tax collection and administration in the future.

Tax authorities will use "data-driven tax administration" as an important means, fully utilizing big data analysis, risk profiling, and other technologies to achieve precise identification, monitoring, and management of key industries, major tax types, and key tax-related matters, thereby enhancing the efficiency of tax and fee collection and administration.

This trend poses higher requirements for corporate tax compliance management and also implies that companies need to accelerate their digital transformation to improve tax data management and risk response capabilities to adapt to the changes in the tax collection and administration model under the new situation.

2.

Tax Services Become More Considerate, Providing Clearer Policy Guidance In addition to focusing on optimizing tax management around "data-driven tax administration," under the requirement of "enhancing tax and fee collection and administration efficiency," the State Taxation Administration has also paid more attention to providing clearer and operable guidance for taxpayers from a systemic level in recent years.

Systematically sorting out and improving the regulatory system of tax-related matters by industry or field is becoming an important measure for the tax department to optimize the supply of the tax system and increase tax certainty.

A series of guidance documents such as the "Guidelines on Major Tax Incentives for Corporate Mergers and Acquisitions" [4], "Guidelines on Major Tax and Fee Incentives for Supporting the Development of Manufacturing Industry" [5], and "Guidelines on Tax Policies for Stabilizing Foreign Trade and Foreign Investment" [6] have comprehensively sorted out and systematically interpreted the current tax incentive policies for key areas of corporate attention such as mergers and acquisitions, manufacturing industry development, and foreign trade and investment, clarifying policy scope and applicable conditions, providing more convenient and efficient policy guidance for taxpayers in related industries and fields.

Recently, the "Operational Guidelines for Cross-Border E-Commerce Export Warehouse Export Tax Refund (Exemption)" [7] (hereinafter referred to as "Operational Guidelines") issued by the State Taxation Administration's Department of Goods and Labor Services is a typical example.

The "Operational Guidelines" detail the regulations and operational processes for tax refunds (exemptions) for the emerging business model of cross-border e-commerce export warehouses, guiding cross-border e-commerce export enterprises to fully utilize and make good use of the current export tax refund policies for goods that have been sold, and to declare and handle tax refunds in a timely manner, fully reflecting the tax department's active efforts to support the development of new foreign trade formats.

Among them, the "Operational Guidelines" point out that the export warehouse model in cross-border e-commerce trade is one of the normal forms of foreign trade.

According to the current export tax refund regulations, the handling of export tax refunds can be declared and handled as long as the prerequisites for export tax refunds are met.

3.

Cross-Border Tax Services Keep Pace with the Times, Laying Out Digital Administration for "Non-Residents" and "Going Global" Enterprises In recent years, facing increasingly frequent cross-border economic activities and a more complex international tax environment, China's tax authorities have followed the trend of digital development and innovatively launched the "Tax Road" cross-border tax service brand.

On the one hand, tax authorities have built an international electronic tax bureau, which has specifically launched the "Non-Resident Cross-Border Tax Handling" scenario, greatly simplifying the tax handling process for non-resident taxpayers and effectively improving the quality and efficiency of cross-border tax services.

On the other hand, the tax authorities have also fully utilized tax big data to strengthen the tax source management of "going global" enterprises.

By verifying the basic information of enterprises, the tax authorities have laid the foundation for refined services and precise policy promotion.

In addition, to further standardize the reporting of corporate cross-border tax information, the State Taxation Administration issued the "Announcement of the State Taxation Administration on Optimizing Tax Services and Simplifying the Forms for Residents to Report Overseas Investments and Income Information" [8], further improving the relevant systems and effectively reducing the burden of enterprise information reporting.

4.

Seeking Tax Certainty, New Challenges in Corporate Tax Management Switching to the perspective of taxpayers, although different enterprises may have their own unique problems in tax management practice due to differences in industry characteristics, business models, development stages, and other factors, with the rapid changes in the business environment, especially against the backdrop of the vigorous development of new formats such as the digital economy and the sharing economy, enterprises are increasingly focusing on the issue of "how to obtain tax certainty in the rapidly changing business scenarios."

The formulation and improvement of the tax system cannot be completely synchronized with the changes in business scenarios, leading to many issues that need to be clarified or adjusted in the current tax policies when facing new formats and models.

On the one hand, the extensive application of modern information technology has given birth to many innovative formats, and the business map of enterprises is continuously expanding, with cross-border operations becoming more and more frequent.

On the other hand, the current tax system is mainly designed based on the characteristics of traditional industries, and there is a lack of clear provisions for tax-related matters in emerging fields, which can easily lead to different interpretations in practical operations.

Tax enterprises and even tax authorities in different regions may have different interpretations of the same or similar economic businesses.

The differences between different standards bring uncertainty to the results of tax processing, bringing more complex tax compliance challenges to enterprises, especially those operating across regions.

As Director Hu pointed out in his signed article, it is necessary to "increase efforts to promote legislation in the tax field, accelerate the revision of tax collection and administration laws, and continuously enhance the rigidity and precision of tax law enforcement..." Creating a certain and transparent tax environment, strengthening the unity of tax compliance and law enforcement, can greatly promote enterprise development and stimulate market vitality.

According to the "2024 Annual Legislative Work Plan of the State Council" [9], the "Draft Revision of the Tax Collection and Administration Law" will be submitted to the Standing Committee of the National People's Congress for deliberation within the year.

Looking at the timetable, it is expected that the "Draft Revision of the Tax Collection and Administration Law Seeking Public Comments" may be published soon and public opinions will be solicited.

In this process, as an important stakeholder in tax policy, enterprises should actively seize the policy window period, express their own demands, and make suggestions for optimizing the tax collection and administration system.

We look forward to the future tax reform and legislative process, and expect clearer and more operable tax processing rules for tax matters involving new formats such as the digital economy and the sharing economy.

At the same time, we also look forward to establishing a sound tax pre-ruling system at the national level, allowing enterprises to obtain authoritative and predictable written replies on uncertain tax processing within a larger national scope, improving the consistency of tax law enforcement, reducing the tax risk of taxpayers, and creating a more certain and predictable tax environment for enterprise innovation and development.

**IV.

Conclusion** Under the complex and changeable domestic and international environment, how enterprises can grasp certainty in uncertainty and achieve a balance between tax risk and operational efficiency is an urgent problem that needs to be solved in this era.

With the further deepening of tax reform, we look forward to clearer and more unified institutional rules to enhance the certainty of tax compliance.

At the same time, through more intelligent and precise tax services, tax and enterprise mutual trust can be enhanced, and uncertainty in tax-related matters can be eliminated to the greatest extent, providing space for economic development and helping to start a new journey for high-quality economic development.