Legal News

In order to clarify issues in the previously promulgated “Administrative Measures on Value Added Tax and Consumption Tax for Exporting Goods and Services (SAT Announcement [2012] No. 24),” SAT released Announcement recently, which has been taken into effect on April 1, 2013. Highlights of Announcement are as follows: The tax of bonded materials and parts under the feeding processing trade shall be calculated based on the amount of real consumption instead of the amount of purchase. To extend the term of tax refund (exemption) declaration. “Announcement” stipulates that the deadline for the application for the tax exemption on export goods…

The State Administration of Taxation released Announcement on Mar. 12, 2013, in which it has further clarified the issues, where the relocation agreement of a policy-based enterprise relocation project has been signed prior to the effective date of Announcement of the State Administration of Taxation on Issuing the Administrative Measures of Enterprise Income Tax on Incomes Obtained from Policy-based Relocation (“Announcement No. 40”) released on Aug. 2012, but the relocation liquidation thereof fails to be completed before such date. The main contents include: The Announcement clarifies that, where the relocation agreement of a policy-based enterprise relocation project has been signed…

Interpretation has been taken into force on Feb. 1, 2013. The biggest highlight of Interpretation is the further explanation on non-competition: Compensation: where the parties fail to mention the compensation, the employee can request a monthly compensation by the employer based on 30% of the average monthly salary over the 12 months preceding the termination or expiration of labor contract, and the minimum amount equivalent to 30% of the average monthly salary is the minimum wage standard of the place where the labor contract is performed. Non-competition restriction will not be automatically terminated where the employer fails to pay compensation.…

On Dec. 29, 2012, Rules has been promulgated, which will be taken into effect on Oct. 1, 2013. It has stipulated the obligations of manufacturer, seller and repairer; responsibilities of 3 guarantees; waiver of the responsibilities of 3 guarantees; settlement of disputes; and penalty of manufacturer. It has also stipulated the term of 3 guarantees, the valid period for return or change, the term and standard for repair, the term and standard for replacement and return, the reasonable compensation undertaken by the consumers and etc. under a quantization principle.

On Dec. 28, 2012, Amendment has been promulgated, which will be taken into effect on Jul. 1, 2013. Amendment has stipulated the restrictions on labor outsourcing, mainly including the following aspects: Make clear the definition of positions: “temporary” position refers to a temporary role of less than six months; “ancillary” position refers to a position providing support services to the primary business of the employer; and “replaceable” position refers to a position in which the temporary worker temporarily replaces an existing employee where the employee is unable to work due to further study, leave or other reasons. Restrictions on the…

“Provisions on the Administration of Recall of Defective Auto Products” (“Provisions”) comes into force in 2004, which is criticized for its legislation hierarchy, its contents lacking of practicality, its punishment is needed to be strengthened. with Provisions, Regulations raises the legislation hierarchy to Administrative Regulations, and amends the following aspects: (a) increasing the amounts of punishment, for example, if the manufacturer hides the defects, or refuses to recall the auto products, the fine shall be calculated based on the percentage of the value of defective auto products, which means there is no maximized amount; (b) further stipulating the investigation rights…

From Aug. 1 2012, the scope of the pilot work of levying value-added tax(“VAT”) in lieu of business tax shall be expanded from Shanghai to Beijing , Tianjin, Jiangsu Province, Anhui Province, Zhejiang Province (including Ningbo), Fujian Province (including Xiamen), Hubei Province and Guangdong Province (including Shenzhen). Levying value-added tax in lieu of business tax shall be conducted in the transportation industry and some modern service industries, which are transportation, R&D and technology, information technology, cultural innovation, logistics supports, lease of corporeal movables, attestation and consulting. The VAT rate for R&D and technology, and lease of corporeal movables is 17%,…

On 16th September, 2012, the State Council released “Suggestions on the Promotion of a Stable Growth in Foreign Trade”, in which two points are highlighted as following: (a)Speed up the relevant processes, reduce the relevant fees. For example, extend the scope of territorial declaration and port clearance under effective supervision; waive the printing costs for paper of verification of export earnings, import payments and the drawback copy of export declaration; waive the custom supervision cost. (b)Optimize the structure of trade, mainly including encourage the imports of advanced technological equipments, key parts and components and daily necessities that are closely related…

“Notice on Individual Income Tax Policies for Work-Related Injury Insurance Benefits Obtained by Employees Injured while Working”(No. 40 [2012] of the Ministry of Finance) has stipulated that work-related injury insurance benefits obtained by employees and their close relatives in accordance with the Regulation on Work-Related Injury Insurance (Order No. 586 of the State Council) shall be exempt from individual income tax. This regulation shall be effective on 1 January, 2011. If the employees injured while working and their close relatives have paid the tax, they can apply to the competent tax authorities, and the authorities shall return the tax accordingly.

The amended “AR” comes into force on 1st Sep. 2012. Compared with the original “AR” came into force on 1st Sep. 2002, the biggest highlights of the revised “AR” is that the scope of the administrativeacts which can be applied for administrative reconsideration is amended from 19 specific administrativeacts and 1 miscellaneous provision to 4 categories of administrativeacts and 1 miscellaneousprovision, which are as follows: (1)refuse to accept the specific administrativeacts conducted by the State Intellectual Property Office(SIPO) concerning the application of patent, patent right; (2)refuse to accept the specific administrative acts conducted by SIPO concerning the application of Layout-Designsfor…