Latest Laws and Regulations of August 2012, I

I. Eight Provinces Including Beijing will gradually Develop the Pilots to be Levied VAT Instead of Business Tax from 1st of August, 2012.

The Ministry of Finance and State Administration of Taxation jointly issued the Notice on Developing the Pilots to be Levied VAT Instead of Business Tax in Transportation Industry and Partly Modern Services Industry in 8 Provinces or Cities including Beijing (hereinafter referred to as the “Notice”) on 31st of July, 2012. According to the Notice, upon the approval of the State Council, the range of pilots is extended to Shanghai, Beijing, Tianjin, Jiangsu, Anhui, Zhejiang, Fujian, Hubei and Guangdong. The transition of such tax policy shall be completed before 1st of September, 2012 in Beijing, 1st of November, 2012 in Fujian and Guangdong and 1st of December, 2012 in Tianjin, Zhejiang and Hubei. The pilot plan is basically the same as that of Shanghai. On 10th of August, 2012, the State Administration of Taxation published the Announcement on Relevant Issues concerning Qualification Verification of a General VAT Taxpayer in 8 Provinces and Cities Including Beijing Developing Pilots to be Levied VAT Instead of Business Tax.

 (From the websites of the Ministry of Finance and State Administration of Taxation)

II. The Shanghai Intellectual Property Administration Issued the Guidelines for Application for General Patent Funding.

Recently, the Shanghai Intellectual Property Administration issued the Guidelines for Application for General Patent Funding of Shanghai Municipality (hereinafter referred to as the “Guidelines”) to support the revised Measures for Patent Funding of Shanghai Municipality taking into effect on 1st of July, 2012(referring to http://www.sipa.gov.cn/gb/zscq/node3/node34/userobject1ai9492.html). According to the Guidelines, it further regulates, for patent application, whatever overseas or domestic, the application materials to be submitted by an eligible applicant, procedures, and requirement of integrity, information management and other details.

(From the website of the Shanghai Intellectual Property Administration)

III. The National Development and Reform Commission Issued the Revised Measures for Administration of Approval of Foreign-invested Projects and Measures for Administration of Approval of Overseas Investment Projects for Public Opinions.

On 16th of August, 2012, the National Development and Reform Commission issued the two Drafts for Public Opinions of the Measures for Administration of Approval of Foreign-invested Projects and the Measures for Administration of Approval of Overseas Investment Projects. The public can put forward opinions and advices in the way of letter or email and the deadline is 15th of September, 2012.

According to the Draft for Public Opinions of the Measures for Administration of Approval of Foreign-invested Projects, the authority to approve foreign investment is decentralized. The local development and reform commission shall have authority to approve the encouraged and permitted projects of which the total amount of investment is no more than 0.3 billion dollars, however, the limited projects of which the total amount of investment is more than 50 million dollars shall be approved by the National Development and Reform Commission. For foreign investors acquiring domestic enterprises, the amount of investment shall be calculated based on the volume of transaction.

The Draft for public opinions of the Measures for Administration of Approval of Overseas Investment Projects mainly focuses on the approval authority and extent of authority. According to invested projects, the overseas investments are categorized into source development and transportation infrastructure, sensitive districts and industries and so on, afterwards, to determine the approval authority according to the amount of investment and investor. In all, the authority is decentralized.

 (From the website of the National Development and Reform Commission)

IV. The China Securities Regulatory Commission (CSRC) Issued the New Provisions on Relevant Issues Concerning the Implementation of the Measures for Administration of Securities Investment within Territory of China by Qualified Foreign Institutional Investor (QFII).

On 27th of July, 2012, the CSRC issued the Provisions on Relevant Issues Concerning the Implementation of the Measures for Administration of Securities Investment within Territory of China by Qualified Foreign Institutional Investors ( hereinafter referred to as the “ Provisions”) which comes into effect upon promulgation , meanwhile the Notice on Relevant Issues Concerning the Implementation of the Measures for Administration of Securities Investment within Territory of China by Qualified Foreign Institutional Investors which was issued on 24th of August, 2006 (hereinafter referred to as the “2006 Notice”) was abolished. The Provisions was published for public opinions during June to July this year. The Provisions, comparing with the 2006 Notice, contain many revised contents, for example, to encourage the entry of long-term foreign investment, the qualification requirements for QFII is largely reduces; the investment scope for QFII is extended to the fixed-income products and stock index futures traded in the Inter-bank bond market, private debt of SMEs and others; all the foreign investors can totally hold no more than 30% A-shares of a listed company, and the procedure of examination and approval is simplified.

(From the website of the China Securities Regulatory Commission)

This essay is quoted from DeBund Newsletter of September.

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