What are the special turnover calculation rules for businesses in the financial industry?
According to previous draft guidance issued by MOFCOM, the turnover of a business is normally required to be calculated by reference to the revenue it generates through the sale of products or the provision of services (but deducting most taxes and surcharges). However, in line with mandatory notification regimes in several other jurisdictions, China has devised the Financial Industry Measures to ensure that the turnover calculation process for financial sector entities distinguishes between revenue generated through fees, commissions and interest, etc (which is taken into account), and other sums of money that may be received and managed by such entities (which are excluded). The calculated turnover is also multiplied by 10 percent after the deduction of business taxes and other charges which, by reducing turnover to a tenth, effectively ‘raises the bar’ for mandatory notification of transactions conducted by financial sector entities, many of whom may otherwise persistently achieve t
