China’ s Latest Laws and regulations in October 2013, Part I

1. Provisions of the Supreme People’s Court on the Procedures of Dealing with Self-Compensation Cases

Promulgated on July 26, 2013 by the Supreme People’s Court, the Provisions on the Procedures of Dealing with Self-Compensation Cases were effective on September 1, 2013.

The self-compensation cases in the Provisions refer to the cases of state compensation handled by a People’s Court where such court is the judicial organ liable for the compensation. The Provisions further indicates that the State compensation groups of primary People’s Courts, and compensation committees of the Intermediate People’s Courts or the People’s Courts of higher level shall each be responsible for the handling of self-compensation cases at the same level. In regard to compensation applications made by a claimant, the People’s Courts shall conduct an examination and file each case in accordance with the Provisions of the Supreme People’s Court on the Work of Case Filing of State Compensation Cases.

The Provisions also indicates ways to undertake a case, controls on avoidance, examination of cases, hearings and negotiations, etc., as well as measures in regard to the suspension and termination of cases. In regard to the trial period and decisions regarding compensation, a People’s Court shall make a decision on whether to provide compensation within two months after the receipt of the compensation application and produce a letter stating its decision regarding said compensation. Where the People’s Court makes a determination to compensate or not compensate, it shall send a letter to the claimant stating its decision within ten days after the date of making its decision.

(Official Website of the Supreme People’s Court: http://www.court.gov.cn/qwfb/sfjs/201308/t20130812_187094.htm

2. Announcement of the State Administration of Taxation on Certain Issues Concerning the Collection and Administration of Vehicle and Vessel Tax

The Announcement of the State Administration of Taxation on Certain Issues Concerning the Collection and Administration of Vehicle and Vessel Tax was promulgated on the Announcement of the State Administration of Taxation [2013] No. 42, by the State Administration of Taxation on July 26, 2013. The Announcement indicates seven issues regarding the collection and administration of vehicle and vessel tax, including recognition of vehicles for special work, verification of tax issues for passenger and goods double-service trucks by the tax authorities, calculation of vehicle and vessel tax payable, tax refunds after return of goods due to vehicle or vessel quality issues, the competent tax authority of the place of vehicle and vessel registration no longer collects vehicle and vessel tax after the tax withholding agent withholds taxes, and the commencement time of collection and payment of penalty for taxes overdue by the tax withholding agents and levy of vehicle and vessel tax on vessels leased in and outside of China.

Among the aforementioned seven issues, regarding the calculation of vehicle and vessel tax payable, the Announcement stipulated that with respect to tax units, such as the quality, dead weight (measured in tons), and length of a boat body specified in the Vehicle and Vessel Tax Law and its implementing regulations, the amount of vehicle and vessel tax payable shall be calculated based on the tax units with the mantissa, if any. In the event the result thereof has more than two decimal places, it can be rounded and limited to two decimal places. The tax interval of a passenger car shall be determined according to the milliliter of gas displacement stated on the motor vehicle registration certificate or travel certificate issued by the vehicle registration authority.

Regarding tax refunds following the return of goods due to vehicle or vessel quality issues, the Announcement indicates that where a vehicle or vessel which has been subject to the vehicle and vessel tax is returned to the producer or distributor due to a quality problem, the taxpayer can apply with the competent tax authorities for a refund of taxes paid during the period from the month in which the vehicle or vessel is returned to the end of the tax year. The month of return of the vehicle or vessel should be the month indicated on the receipt of return of goods.

 (Official Website of the State Administration of Taxation: http://www.chinatax.gov.cn/n8136506/n8136593/n8137537/n8138502/12359032.html)

3. Guide Opinions of the National Development and Reform Commission on Strengthening Financing Services for Small and Micro Enterprises and Supporting Development of Small and Micro Enterprises

Promulgated on July 23, 2013 by the National Development and Reform Commission, the Guide Opinions on Strengthening Financing Services for Small and Micro Enterprises and Supporting Development of Small and Micro Enterprises is aimed at developing more financing channels for small and micro enterprises, relieving the financing difficulties of small and micro enterprises, and enhancing the support of small and micro enterprises.

The “small and micro enterprises” are defined in the Opinion as small and micro enterprises stipulated in the Provisions for Classification Standards of Small and Medium-sized Enterprises, Gong Xin Bu Lian Qi Ye [2011] No. 300. The Opinion includes eleven opinions, including those supporting the establishment of a smooth work mechanism with local fiscal departments, etc. The Opinion also indicates support for eligible venture capital enterprises, equity investment enterprises and industry investment funds to issue enterprise bonds, particularly for investing in small and micro enterprises, to support the shareholders or limited partners of eligible venture capital enterprises, equity investment enterprises and industry investment funds to issue enterprise bonds to enlarge the capital size of venture capital enterprises, as well as equity investment enterprises and industry investment funds. Furthermore, the Opinion indicates efforts to improve the design of mechanisms relating to collective bonds issued by small and medium-sized enterprises, the simplification of review procedures, improvement of review efficiency and the gradual enlargement in the size of collective bonds issued by small and medium-sized enterprises. In addition, the Opinion encourages the enlargement of the pilot scale of credit-enhanced collective bonds of small and micro enterprises.

In administrative aspects, the Opinion requires the record-filing authorities of venture capital enterprises at the provincial and sub-provincial levels to establish a more effective work mechanism with local fiscal departments to ensure eligible venture capital enterprises enjoy preferential tax policies in a timely and complete manner. The provincial development and reform commissions shall work together with related departments to speed up the formulation of policies and measures for government-invested equity investment enterprises and industry investment funds, and support small and micro enterprises, as well as support of “credit-enhanced collective bonds of small and micro enterprises” by way of government risk mitigation funds and bond discounts to steadily enlarge the pilot scale thereof.

(Official Website of Central People’s Government:

http://www.gov.cn/zwgk/2013-07/25/content_2455259.htm)

4. Announcement of the State Administration of Taxation on Issues Concerning the Implementation of Preferential Income Tax Policies for Software Enterprises

Promulgated on July 25, 2013 by the State Administration of Taxation, the Announcement on Issues Concerning the Implementation of Preferential Income Tax Policies for Software Enterprises is aimed at encouraging the implementation of preferential income tax policies for software enterprises.

The Announcement indicates six issues, including preferential software enterprise income tax policies, etc. Preferential income tax policies for software enterprises are applicable to software enterprises that have been recognized and subject to taxation based on relevant account checking. For the purposes of this Announcement, “recognized” means that a software enterprise is recognized by a state-designated software enterprise recognition institute in accordance with relevant provisions on the recognition and administration of software enterprises, and has acquitted a software enterprise recognition certificate. The Announcement further indicates that the period of regular tax reduction and exemption incentives granted to a software enterprise should be calculated continuously, and should not be interrupted due to any losses or other scenarios in the interim.

Regarding recognition of qualification for preferential income tax policies, the Announcement sets a timeline that after January 1, 2011, the connection of recognition and administration of software enterprises legally established in China shall be subject to the provisions of the Announcement of the State Administration of Taxation [2012] No. 19, and the policies and recognition, administration and connection of software enterprises legally established in China prior to December 31, 2010 shall be subject to the provisions of Article 5 of this Announcement. The Announcement shall apply to foregoing matters involved in the recognition and preferential treatment administration of integrated circuit production enterprises and integrated circuit design enterprises.

 (Official Website of the State Administration of Taxation: http://www.chinatax.gov.cn/n8136506/n8136593/n8137537/n8138502/12359032.html)

5. Several Opinions of the State Administration for Industry and Commerce on Accelerating the Development of Circulation Industry

Promulgated on July 23, 2013 by the State Administration for Industry and Commerce, the Several Opinions on Accelerating the Development of Circulation Industry will further implement Several Opinions of the State Administration for Industry and Commerce on Accelerating the Development of Circulation Industry.

The Opinion will promulgate the development of the functions of the Industry and Commerce departments, including developing law enforcement efforts of the markets and the supervision and inspection efforts of commercial qualities in the circulation domain; in addition to completing the long-term mechanism for fighting against IP infringement and the manufacturing of counterfeit and inferior commodities, to also develop law enforcement in the realm of online commodity transactions, with reform of the industrial and commercial registration, thus further strengthening the construction of a more reliable credit system.

With regard to the promotion of circulation industry, the Opinion actively puts forward healthy development of electronic commerce, and encourages the registration of individual trademarks, including actively supporting the circulation industry to develop online commodity transactions and agricultural leading enterprises, and in regard to the latter, the construction of an online transaction market specifically for the wholesale of agricultural products, as well as carrying out centralized online trading activities in order to improve and transform the traditional market current in place. Furthermore, based on strengthening the trademark licensing system, as well as the recording and publication thereof, the Opinion encourages the promotion of marketing modes of retail businesses, thereby promoting a change in various modes of commerce in retail businesses, raising the proportion of those able to support themselves.

With respect to litigation, the Opinion expressly promotes cooperation in completing the revision of the Trademark Law, Commercial Law, Consumer Protection Law and Anti-unfair Competition Law, and in completing the revision, drafting and submission of the rules and regulations of the aforementioned laws. Regulations for industrial and commercial administration shall be stipulated timely to conform with the practical enforcement of industrial and commercial administrations and to promote the development of the circulation industry; related administrative regulations to the Trademark Law, the Commercial Law, the Consumer Protection Law and the Anti-unfair Competition Law shall also be revised, especially to complete the administrative regulations whose fields of supervision are online commodity transactions and antitrust.

(XinHuaNet:http://news.xinhuanet.com/2013-08/02/c_125108355.htm)

6. Circular of National Health and Family Planning Commission on Printing and Distributing the Administrative Regulations for the Acquisition and Distribution of Donated Human Organs (for Trial Implementation)

Promulgated on August 13, 2013 by the National Health and Family Planning Commission, the Circular on Printing and Distributing the Administrative Regulations for the Acquisition and Distribution of Donated Human Organs (for Trial Implementation) further regulates the acquisition and distribution of donated human organs. The Circular (for Trial Implementation) was put into force on September 1, 2013.

The Circular (for Trial Implementation) comprises five parts, among which are the General Rules, Acquisition of Donated Human Organs, Distribution of Donated Human Organs, and the Supervision and Administration and Supplementary Rules.

In the General Part, it mainly expresses the legal basis and scope of application to promulgate the Circular (for Trial Implementation), as well as the duties of the administrative departments of health (health and family planning) at all levels.

In the part on Acquisition of donated human organs, it indicates the process of acquisition of donated human organs, and requires establishing local organizations to be in charge of the acquisition of donated human organs, whom shall assume such responsibility within the relevant areas. This Part further requires establishing a group of coordinators for the donation of human organs, and stipulates the qualifications, training and performance obligations of such coordinators.

In the part on Distribution of Donated Human Organs, it indicates the principles of distribution of donated human organs, which requires that the distribution must be conducted through the Chinese Human Organs Distribution and Sharing Computer System (hereinafter referred to as the human organs distribution system). It encourages qualified provinces (as well as districts or municipalities) to implement a uniform waiting list for human organ donation. It further indicates the responsibility of maintaining the waiting lists of the human organs distribution system by the transplanted hospitals.

In Supervision and Administration part, it indicates the penalty for the illegal behaviors during the process of acquisition and distribution of the donated human organs. It further requires the information publication, including publication to the whole society of the medical institution list, which among them has registered for the subject of human organs transplantation, a list and scope of service for each donated human organ, as well as acquisition organizations and a list of contact information for qualified human organ donation coordinators.

 (Official Website of National Health and Family Planning Commission: http://www.moh.gov.cn/yzygj/s3573/201308/8f4ca93212984722b51c4684569e9917.shtml)


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