06 March 2018 
Andrea Marshall, Tax Specialist
Several UK universities have received communications from their advisers over the last few days warning them of changes recently announced by the Chinese State Administration of Taxation ('SAT') to the permanent establishment rules in China. From 1 April (which is not far away!) any foreign educational institutes in China and Sino-foreign educational joint programmes will be regarded as permanent establishments in China, meaning that they should be registered with the tax authorities and tax should be paid on the associated activities. The announcement states that 'The place where the Joint Education Institution with non-legal status and Joint Education Programme conducting teaching activities constitutes the foreign contracting party’s Permanent Establishment in China.' There is also an additional concern that this could also have an effect on the income tax position of 'fly in faculty'. If your university has operations in China, in particular a 'JEP' or 'JEI', and your adviser hasn't yet contacted you, it's time to get in contact with them!
You can also see what other members are saying about this issue in this ongoing discussion, and you can see a copy of the English translation of the SAT Public Notice here.
