China Laws and Regulations Update in August 2018

1.Decision to Amend the Provisional Rules on Filings of Establishment and Change of Foreign Funded Enterprises

Promulgated by the Ministry of Commerce

File number: No.19 MOC Order in 2018

Promulgation date: 29 June 2018

Effective date: 30 June 2018

The Provisional Rules states that in order to establish a foreign funded enterprise or change a domestic enterprise into a foreign funded enterprise by merger, acquisition, absorption, combination, etc. by filing as required by the Provisional Rules, filings of establishment of the foreign-funded enterprise shall be submitted online during the establishment and change recordation processes of the administration of industry and commerce and the market supervision and regulation department and the recordation authority shall begin the recordation process upon and inform the investor of receipt of the filings transferred by the administration of industry and commerce and the market supervision and regulation department. If the foreign-funded enterprise or its investor delays in submitting or has a material omission in its filings, the commerce department should give an order to correct it within a limited period of time. A fine of less than RMB 30,000 should be payable for a failure to correct it as required or a serious misconduct. (Source: Website of the Ministry of Commerce)

http://www.mofcom.gov.cn/article/b/c/201806/20180602761078.shtml

2.Announcement on Clarifying Several Issues Relating to Value-Added Tax on Running Schools through Sino-Foreign Cooperation, Etc.

Promulgated by the State Administration of Taxation

File number: No.42 SAT Announcement in 2018

Promulgation date: 25 July 2018

Effective date: 25 July 2018

The Announcement deals with matters relating to value-added tax on running schools through sino-foreign cooperation and other activities, including: no value-added tax on income from diploma programs through sino-foreign educational cooperation between educational institutions and schools providing diploma programs, sales that are equal to prices and extra income received by air transport sales agencies from sales of domestic air fares after deduction of net settlements and relevant costs collected from customers and paid to air transport businesses, taxes on sales of self-manufactured equipment and related installation services payable by general tax payers that should be calculated separately, taxes on the installation services that can be calculated according to relevant simplified tax calculation method as if they were provided by Party A, sales of equipment purchased from abroad and related installation services that have been calculated separately according to provisions relating to additional business, taxes on the installation services that can be calculated according to relevant simplified tax calculation method as if they were provided by Party A, value-added tax on maintenance services for equipment installed and used that should be paid as value-added tax on “other modern services”. (Source: Website of the State Administration of Taxation)

http://www.chinatax.gov.cn/n810341/n810755/c3644392/content.html

3.Provisional Rules for the Human Resource Market

Promulgated by the State Council

File number: No.700 SC Order

Promulgation date: 17 July 2018

Effective date: 1 October 2018             

The Rules states that any HR service provider that intends to act as professional agents for commercial purposes should apply for and obtain the HR service permit, an administrative permit issued by the administrative department for human resources and social security. Any person who acts as a professional agent without permission will be given an order by the administrative department for human resources and social security to close the business or stop doing any activity that only professional agents can do. Any illegal profits obtained should be confiscated with payment of a fine between RMB 10,000 and RMB 50,000. (Source: Website of the State Council)

http://www.gov.cn/zhengce/content/2018-07/17/content_5306967.htm

4.Regulations on Several Issues Relating to Establishment of the International Business Tribunal

Promulgated by the Supreme People’s Court

File number: L.I.[2018] No.11

Promulgation date: 27 June 2018

Effective date: 1 July 2018

The Regulations mainly deals with the nature, name and place of the international business tribunal, acceptable cases, appointment of judges, trials, ways to ascertain foreign laws, the group of experts in international business, mediation on behalf of the international business tribunal, “integrated” settlement system combining litigation, mediation and arbitration processes. (Source: Website of the Supreme People’s Court)

http://www.court.gov.cn/fabu-xiangqing-104602.html

5.Interpretation of Several Issues Relating to Application of the Statute of Limitation Rules Included in the General Provisions of the Civil Law of the People’s Republic of China

Promulgated by the Supreme People’s Court

File Number: L.I.[2018] No.12

Promulgation date: 18 July 2018

Effective date: 23 July 2018                                 

The Interpretation states that the three-year statute of limitation rule included in the General Provisions of the Civil Law should apply if the statute of limitation begins from a day after the effective day of the General Provisions of the Civil Law; if the first or second anniversary of the statute of limitation comes after the effective day of the General Provisions of the Civil Law, the people’s court should approve the claim that the three-year statute of limitation rule included in the General Provisions of the Civil Law should apply; if the first or second anniversary of the statute of limitation comes before the effective day of the General Provisions of the Civil Law, the people’s court should refuse the request that the three-year statute of limitation rule included in the General Provisions of the Civil Law should apply; If the cause for suspension of the statute of limitation still exists on the effective day of the General Provisions of the Civil Law, the suspension of the statute of limitation rule included in the General Provisions of the Civil Law should apply. (Source: Website of the Supreme People’s Court)

http://www.court.gov.cn/fabu-xiangqing-108251.html

6.Interpretation (IV) of Several Issues Relating to Application of the Insurance Law of the People’s Republic of China

Promulgated by the Supreme People’s Court

File number: L.I.[2018] No.13

Promulgation date: 31 July 2018

Effective date: 1 September 2018                          

The Interpretation deals with issues relating to transfer of the insured matters and states that the people’s court should approve the inheritor’s claim for inheriting rights and obligations of the insured who has died and the claim made by the insured or assign that the insurer should pay for the incident covered by the insurance contract that occurs before the insurer replies to the notice of the transfer of the insured matters. (Source: Website of the Supreme People’s Court)

http://www.court.gov.cn/fabu-xiangqing-110571.html

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