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THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION NOTICE ON THE POLICIES RELATING TO THE INDIVIDUAL INCOME TAX ON DIVIDENDS AND BONUSES

Ministry of Finance, State Administration of Taxation

The Ministry of Finance and the State Administration of Taxation Notice on the Policies Relating to the Individual Income Tax on Dividends
and Bonuses

Cai Shui [2005] No. 102

The public finance departments (bureaus), the state taxation bureaus and local taxation bureaus of all provinces, autonomous regions,
municipalities directly under the Central Government and cities specifically designated in the state plan, and the Public Finance
Bureau of Xinjiang Production and Construction Corps:

With a view of promoting the development of the capital market, upon the approval of the State Council, the notice on the policy relating
to the individual income taxes on dividends and bonuses is given as follows:

I.

The individual income taxes on the incomes of individual investors from the dividends and bonuses of listed companies shall be levied
in accordance with the current tax laws after temporarily deducting 50% of individual taxable incomes.

II.

The aforesaid provision shall be implemented as of the date of release of this notice.

Ministry of Finance

State Administration of Taxation

June 13, 2005



 
Ministry of Finance, State Administration of Taxation
2005-06-13

 






THE STATE ADMINISTRATION OF TAXATION CIRCULAR ON THE COMING INTO EFFECT AND IMPLEMENTATION OF THE AGREEMENT ON AVOIDING DOUBLE TAXATION BETWEEN THE CHINESE AND THE SRI LANKAN GOVERNMENTS

State Administration of Taxation

The State Administration of Taxation Circular on the Coming into Effect and Implementation of the Agreement on Avoiding Double Taxation
between the Chinese and the Sri Lankan Governments

Guo Shui Fa [2005] No. 78

All the bureaus of State taxation and local taxation in all provinces, autonomous regions, municipalities directly under the Central
Government, and cities specifically designated in the state plan, Yang Zhou Taxation Institute, and all departments under the SAT:

Chinese government and the government of the Democratic Socialist Republic of Sri Lanka signed the agreement on avoiding double taxation
and preventing tax evasion on incomes in Beijing on August 11, 2003. The agreement has been confirmed by both governments by exchanged
notes on April 22, 2005 and March 24, 2005, and has now completed the necessary legal procedures for coming into force. In accordance
with the stipulations of Article 28 of the agreement, the agreement will come into force on May 22, 2005, and will be implemented
on January 1, 2006. The State Administration of Taxation has distributed the agreement text as “Letter No. 950 [2003] of the State
Administration of Taxation” on August 14, 2003. The agreement shall be implemented accordingly.

The State Administration of Taxation

May 11, 2005



 
State Administration of Taxation
2005-05-11

 






PROVISIONS FOR THE ADMINISTRATION ON THE EMPLOYMENT OF TAIWAN, HONG KONG AND MACAO RESIDENTS IN THE MAINLAND

Order of the Ministry of Labor and Social Security of People’s Republic of China

No.26

The Provisions for the Administration on the Employment of Taiwan, Hong Kong and Macao Residents in the Mainland, which has been adopted
at the tenth executive meeting of the Ministry of Labor and Social Security on June 2, 2005, are hereby promulgated and shall go
into effect as of October 1, 2005.
Zheng Silin, the Minister of Ministry of Labor and Social Security

June 14, 2005

Provisions for the Administration on the Employment of Taiwan, Hong Kong and Macao Residents in the Mainland

Article 1

With a view to maintaining the lawful rights and interests related to the employment of Chinese citizens resided in Taiwan, Hong
Kong and Macao in the Mainland (hereinafter referred to as the persons from Taiwan, Hong Kong and Macao) and strengthening the administration
on the employment of the persons from Taiwan, Hong Kong and Macao by the employing entities in the Mainland, the present Provisions
are formulated according to the Labor Law of the People’s Republic of China and other relevant laws and administrative regulations.

Article 2

The present Provisions shall be applicable to the persons from Taiwan, Hong Kong and Macao and working in the Mainland, and the enterprises,
public institutions, individual industrial and commercial households and other legally registered organizations in the Mainland (hereinafter
referred to as the employing entities) that hire persons from Taiwan, Hong Kong and Macao or accept the assigned persons from Taiwan,
Hong Kong and Macao.

If there are other state provisions for the administration on the employment of experts from the regions of Taiwan, Hong Kong and
Macao, such provisions shall prevail.

Article 3

The “person from Taiwan, Hong Kong and Macao and working in the Mainland” as mentioned in the present Provisions refers to:

(1)

the persons that have established labor relationship with the employing entities;

(2)

the persons from Hong Kong and Macao that engage in self-employed business in the Mainland; and

(3)

the persons who have established the labor relationship with foreign or Taiwan, Hong Kong and Macao employing entities and assigned
by them to work in a same employing entity in the Mainland accumulatively for more than three months within one year (from January
1 to December 31 of the Gregorian calendar year).

Article 4

The employment of the persons from Taiwan, Hong Kong and Macao in the Mainland shall be subject to the employment permit system.
Where an employing entity plans to hire the persons from Taiwan, Hong Kong and Macao or accept the assigned persons from Taiwan,
Hong Kong and Macao, it shall apply for the Employment Permits for them (hereinafter referred to as the employment permits); persons
from Taiwan, Hong Kong or Macao, who engage in the individual industrial and commercial households in the Mainland, shall apply for
employment permits by themselves. Upon authorization and with employment permits, the employment of the persons from Taiwan, Hong
Kong and Macao in the Mainland is protected by law.

The archival filing system shall be adopted when an employing entity hires the persons from Taiwan, Hong Kong and Macao or accepts
the assigned persons from Taiwan, Hong Kong and Macao.

The Ministry of Labor and Social Security shall print the Employment Permits uniformly.

Article 5

When hiring persons from Taiwan, Hong Kong and Macao or accepting the assigned persons from Taiwan, Hong Kong and Macao, the employing
entity shall observe the state laws and regulations.

Article 6

Where an employing entity plans to hire persons from Taiwan, Hong Kong and Macao or accept the assigned persons from Taiwan, Hong
Kong and Macao, the said persons shall meet the following conditions:

(1)

being aged 18 up to 60 (the age of an investor that directly participates in the business operation or a technical person badly needed
in the Mainland may be over 60);

(2)

being in good health;

(3)

having effective travel permits (including the valid certificates for Taiwan, Hong Kong and Macao residents to come and go to the
Mainland as issued by the competent organs in the Mainland);

(4)

having corresponding qualification certificates as prescribed by the State in the case of that the engagement in professional (technical)
occupations is prescribed by the State; and

(5)

meeting other qualifications as prescribed by laws and regulations.

Article 7

When applying for employment permits for the employment of the persons from Taiwan, Hong Kong and Macao in the Mainland, an employing
entity shall submit the Application Form for the Employment of Taiwan, Hong Kong and Macao Residents in the Mainland and the following
effective documents to the local administrative department of labor and social security at the prefecture (municipal) level:

(1)

the business license or the registration certificate of the employing entity;

(2)

the effective travel permits of the persons to be hired or the assigned persons to be accepted;

(3)

the health certificates of the persons to be hired or the assigned persons to be accepted;

(4)

the letters of intent for employment or employment certificates;

(5)

the corresponding professional qualification certificates if the persons to be hired will engage in the professional (technical)
occupations as prescribed by the State; and

(6)

other documents as prescribed by laws and regulations.

Article 8

The administrative departments of labor and social security shall make a decision on the approval of employment within ten working
days as of the receipt of the Application Form for the Employment of Taiwan, Hong Kong and Macao Residents in the Mainland and the
relevant documents as submitted by an employing entity; and if the conditions as prescribed by Article 6 of the present Provisions
are met, the administrative departments shall approve the employment and issue an employment permits; if the conditions as prescribed
by Article 6 of the present Provisions are not met, the administrative departments shall disapprove the employment and notice the
employing entity of the disapproval in written form and explain the reasons.

Article 9

The employing entity shall, upon the strength of employment permits, go through the formalities for registration and archival filing
for the employment of persons from Taiwan, Hong Kong and Macao at the administrative department of labor and social security that
has issued the said permits.

Article 10

Where a person from Hong Kong or Macao engages in the individual industrial and commercial household in the Mainland, he shall, upon
the strength of household business license, his health certificate and effective travel permit, apply with the local administrative
department of labor and social security at the prefecture (municipal) level for an employment permit. The administrative department
of labor and social security shall handle it within five working days upon the receipt of the documents as submitted by the person
from Hong Kong or Macao.

Article 11

The employing entity shall sign labor contracts with persons from Taiwan, Hong Kong or Macao as hired thereby, and pay the social
insurance premiums in light of the Interim Provisions on the Collection and Payment of Social Insurance Premiums.

Article 12

When an employing entity terminates or dissolves the labor contracts with persons from Taiwan, Hong Kong or Macao, or when the employment
terms of persons from Taiwan, Hong Kong or Macao expire, the employing entity shall write off the employment permit at the organ
that originally issued the permit within ten working days upon the termination or dissolution of the labor contracts or upon the
expiration of the employment terms of the persons from Taiwan, Hong Kong or Macao.

When persons from Hong Kong or Macao engaging in the individual industrial and commercial household in the Mainland suspend or cease
his business, they shall write off the employment permits at the organs that have originally issued the permits within 30 working
days upon the suspension or ceasing.

Article 13

In case any employment permit is lost or destroyed, the employing entity shall apply to the administrative department of labor and
social security that has issued the said permit for re-issuing a new employment permit for the person from Taiwan, Hong Kong or Macao.

Article 14

The employing entity for which a person from Taiwan, Hong Kong or Macao works shall be identical with that indicated in the employment
permit. Where the employing entity is altered, the altered employing entity shall apply to the local administrative department of
labor and social security at the prefecture (municipal) level for another employment permits for the persons from Taiwan, Hong Kong
or Macao.

Article 15

If a labor dispute between an employing entity and a person from Taiwan, Hong Kong or Macao hired by it occurs, it shall be settled
according to the relevant state provisions on the settlement of labor disputes.

Article 16

In case an employing entity fails to apply for employment permits or go through the formalities for archival filing when hiring any
person from Taiwan, Hong Kong or Macao or accepting any assigned person from Taiwan, Hong Kong or Macao, it shall be charged to make
corrections by the administrative department of labor and social security, and a fine of 1000 Yuan may be imposed upon it.

Article 17

In case an employing entity fails to write off the employment permit when terminating or dissolving a labor contract with any person
from Taiwan, Hong Kong or Macao or when the employment term of any person from Taiwan, Hong Kong or Macao expires, it shall be charged
to make corrections by the administrative department of labor and social security, and a fine of 1000 Yuan may be imposed upon it.

Article 18

In case an employing entity forges, alters, fraudulently uses or transfers the employment permits, it shall be charged to make corrections
by the administrative department of labor and social security, and be fined 1000 Yuan upon it. And the said employing entity may
not hire any person from Taiwan, Hong Kong or Macao within one year.

Article 19

The present Provisions shall go into effect as of October 1, 2005. The Provisions on the Administration of the Employment of Taiwan,
Hong Kong and Macao Residents in the Mainland as promulgated by the former Ministry of Labor on February 21, 1994 shall be abolished
simultaneously.



 
Ministry of Labor and Social Security
2005-06-14

 






CIRCULAR OF MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION ON ABOLISHING TAXATION POLICIES RELATING TO STEELS PROCESSED AND EXPORTED FOR SPECIAL PURPOSE

Ministry of Finance, The State Administration of Taxation

Circular of Ministry of Finance and the State Administration of Taxation on Abolishing Taxation Policies relating to Steels Processed
and Exported for Special Purpose

Cai Shui [2005] No.105

To department (bureaus) of finance in all the provinces, autonomous regions, municipalities directly under the Central Government
and cities specifically designated in the state plan, State Administration of Taxation, financial bureau of Xinjiang Production and
Construction Corporations,

Upon the approval of the State Council, the existing taxation policies related to steels processed and exported for special purpose
shall be abolished, the related matters are hereby notified as follows:

I.

The documents listed below shall be abolished from the date of July 1, 2005,

1.

Circular on Tax-refund on Domestic Steel Sold in Tax-reserving Zones Replacing Imported Steel for Listed Enterprises (Cai Shui Zi
[1998] No.53);

2.

Complementary Circular on Modifying the Steel Producing Substitution Measures of Ministry of Finance, The state Economy and Trade
Commission, The State Administration of Taxation and The General Administration of Customs(Cai Shui Zi [1999] No.34);

3.

Circular on the Steel Producing Substitution Measures of The state Economy and Trade Commission, Ministry of Finance, The State Administration
of Taxation and The General Administration of Customs(MFOTEC Trade[1999] No.144);

4.

Circular on Distributing ‘The Detailed Implementing Rules on Modifying the Steel Producing Substitution Measures’ of The State Administration
of Taxation, The state Economy and Trade Commission, Ministry of Finance, The General Administration of Customs and State Administration
of Foreign Exchange (Guo Shui Fa [1999] No.68);

5.

Circular on Issues Relating to Adjusting the Steel Producing Substitution Measures of The state Economy and Trade Commission, Ministry
of Finance, The State Administration of Taxation and The General Administration of Customs(MFOTEC Trade[2002] No.381);

6.

Circular on Tax-refund on Steels Processed and Exported for Special Purpose for Listed Enterprises of Ministry of Finance and The
State Administration of Taxation (Cai Shui [2004] No.15);

7.

Circular on Issues Relating to Ensuring the List of Tax-refund on Steels Processed and Exported for Special Purpose Enterprises of
Ministry of Finance and Ministry of Business(Cai Shui [2004] No.102).

II.

Value-added tax shall be levied and invoice on value-added tax shall be issued on domestic steel sold by listed enterprises to the
processing and exporting enterprises producing exporting products for special purpose in accordance with law, and no offset shall
be available from the date on.

III.

The known plan for the duty exemption on processing and exporting steels for special purpose in 2005 shall be reissued after being
adjusted by The State Administration of Taxation. The steels processed and exported for special purpose listed in the adjusted plan
shall be sold within the date of June 30, 2005, and the supervision rules on steel producing substitution shall be issued before
the date of June 30, 2005 by The Ministry of Supervision.

IV.

The offset taxation shall be collected and late fee shall be captured in accordance from the listed enterprises by local Taxation
Offices should these enterprises, after the sale and the issuing of the invoice of the steels processed and exported for special
purpose under the supervision rules on steel producing substitution, have not received the ensuring purchasing list on steel producing
substitution from local Taxation Offices 3 months after having all the offset procedures finished.

V.

As for the steels processed and exported for special purpose duty-freely sold to processing enterprises by listed enterprises ahead
of June 30, 2005, local Taxation Offices shall continue their work on the administration of tax on the use of duty-free steels processed
and exported for special purpose in accordance with laws such as the Circular on Distributing ‘the Detailed Implementing Rules on
Modifying the Steel Producing Substitution Measures’ of The State Administration of Taxation, The state Economy and Trade Commission,
Ministry of Finance, The General Administration of Customs and State Administration of Foreign Exchange (Guo Shui Fa [1999] No.68).

This circular is specifically issued.

Ministry of Finance

The State Administration of Taxation

June 15, 2005



 
Ministry of Finance, The State Administration of Taxation
2005-06-15

 






CIRCULAR OF THE MINISTRY OF FINANCE AND THE CHINA BANKING REGULATORY COMMISSION ON REGULATING THE WORK OF ASSET APPRAISAL IN THE NON-PERFORMING ASSETS DISPOSAL IN ASSET MANAGEMENT COMPANIES

the Ministry of Finance, the China Banking Regulatory Commission

Circular of the Ministry of Finance and the China Banking Regulatory Commission on Regulating the work of Asset Appraisal in the Non-performing
Assets Disposal in Asset Management Companies

Cai Qi [2005] No. 89

Jun. 15,2005

The departments (bureaus) of finance, the banking regulatory offices of all provinces, autonomous regions and municipalities directly
under the Central Government, all financial asset management companies:

With a view to regulating the acts of the asset management companies, asset appraisal institutions and certified asset appraisers
in the non-performing assets disposal, further clarifying the functions and roles of the asset management companies, asset appraisal
institutions and certified appraisers, and promoting the orderly disposal of non-performing assets, you are hereby notified of the
relevant issues of asset appraisal in the non-performing assets disposal:

I.

The Requirements for Asset Management Companies in Non-performing Assets Disposal

An asset management company shall, in the non-performing assets disposal, strengthen the institutional improvement and internal control,
intensify the management of the asset appraisal and the utilization of the appraisal reports in the non-performing assets disposal,
and give full play to the positive roles of the appraisal institutions in the non-performing assets disposal.

1.

The asset management company shall regard the non-performing assets disposal as an important link, and shall, in light of the concrete
circumstances of various non-performing assets, entrust an asset appraisal institution to assess the to-be-disposed non-performing
assets in strict accordance with the relevant laws and regulations. It shall strictly comply with the appraisal-prior-to-disposal
procedure, shall not operate conversely;

2.

The asset management company shall further improve the system for selecting and hiring the best asset appraisal institution. It shall,
in strict compliance with the industrial qualifications, choose an asset appraisal institution with an asset appraisal qualification
certificate to conduct an appraisal in the non-performing assets disposal. It shall introduce the competition mechanism into the
course of selecting and hiring an asset appraisal institution, shall give priority to the asset appraisal institutions with good
reputation, qualification and professional ethics and shall not merely consider the lowest appraisal fee as the unique basis for
selecting the asset appraisal institution;

3.

The asset management company shall maintain the independence of the appraisal institution, shall actively help it to complete the
appraisal, shall not interfere with its normal practice, nor insinuates it and the certified asset appraisers to issue any untrue
or false appraisal report;

4.

The asset management company shall use the conclusion of value appraisal or value analysis issued by the appraisal institution reasonably
and properly. It shall not use it maliciously.

II.

The Requirements for Appraisal Institutions and Certified Asset Appraisers in the Non-performing Assets Disposal

During the course of disposing non-performing assets, the asset appraisal institution and certified appraisers shall practice in strict
accordance with the law, shall ensure the independence, objectivity and impartiality of their practices in pursuance of the relevant
appraisal standards and norms, and shall safeguard the public interests, as well as the legitimate rights and interests of all parties
concerned to the asset appraisal.

1.

The asset appraisal institutions and certified asset appraisers shall practice in strict accordance with the relevant laws, regulations
and asset appraisal rules, scrupulously abide by the professional ethics and shall be diligent and dutiful. They shall follow the
necessary asset appraisal procedures in strict compliance with the relevant provisions. Their appraisal measures, appraisal reports
and value analysis reports shall conform to the relevant laws, regulations and asset appraisal rules. They shall not cancel any necessary
asset appraisal procedure, nor cater for any improper request of the entrusting party or interested parties, nor issue any untrue
or false appraisal report;

2.

During the course of appraising non-performing assets, the asset appraisal institutions and certified asset appraisers shall strictly
abide by the Guiding Opinions on the Financial Appraisal of Non-performing Assets (Zhong Ping Xie[2005] No. 37) issued by the China
Appraisal Society, and shall regulate the acts of appraising non-performing assets;

3.

An appraisal institution shall choose and assign competent professional certified asset appraisers to perform the businesses of appraising
non-performing assets, intensify the quality control of performing, strictly implement its internal level-by-level verification procedures,
implement the verification responsibility, ensure the quality of appraisal of non-performing assets and protect the legitimate rights
and interests of the parties to the asset appraisal.

III.

The Requirements for the Supervision over Appraisal Businesses of the Non-Performing Asset

The Ministry of Finance and China Appraisal Society shall strengthen the supervision over asset appraisal businesses in the non-performing
assets disposal. The public finance departments and industrial associations of all provinces, autonomous regions and municipalities
directly under the Central Government shall further intensify the supervision over asset appraisal businesses in the non-performing
assets disposal, strengthen the quality inspection over the asset appraisals in the non-performing assets disposal, promote the quality
of asset appraisal practices in non-performing assets disposal and offer better asset appraisal services in non-performing assets
disposal.

Where an asset appraisal institution and its certified asset appraisers issue any untrue or false report by colluding with the entrusting
party or the relevant interested party, once found, the appraisal qualification certificate of the asset appraisal institution shall
be revoked by the financial department and the certificates of the certified asset appraisers shall be revoked by the China Appraisal
Society.

The China Banking Regulatory Commission shall, in pursuance of the law, strengthen the supervision over the appraisal entrustment
in the non-performing assets disposal by the asset management companies and over the utilization of the asset appraisals so as to
give full play to the positive roles of asset appraisal in the non-performing assets disposal.

An asset management company shall strictly abide by the relevant provisions on the non-performing assets disposal and shall do well
the work of non-performing assets disposal. Where anyone insinuates or colludes with the appraisal institution and certified asset
appraisers to issue untrue or false appraisal report or uses any appraisal report maliciously, if it is found, the liabilities of
the relevant institution and person liable shall be investigated for.



 
the Ministry of Finance, the China Banking Regulatory Commission
2005-06-15

 






CIRCULAR ON RELEVANT ISSUES CONCERNING THE FURTHER IMPROVEMENT OF PROCEDURE FOR THE APPLICATION AND EXAMINATION OF RAISING SECURITIES INVESTMENT FUNDS

China Securities Regulatory Commission

Circular on Relevant Issues Concerning the Further Improvement of Procedure for the Application and Examination of Raising Securities
Investment Funds

Zheng Jian Ji Jin Zi [2005] No. 101

To various fund management companies and fund custodian banks

In order to further improve the procedure for the application and examination of raising securities investment funds (hereinafter
referred to as the “funds”) , improve the review efficiency and quality, promote the sound and standardized development of fund market,
and subject to the Securities Investment Fund Law, Measures for the Administration of Operation of Securities Investment Funds and
the Interim Measures for the Administration of Professional Consultative Committee (Zheng Jian Ji Jin Zi [2003] No.13) and the Provisions
of the China Securities Regulatory Commission on the Procedures for the Implementation of Administrative License (For Trial Implementation)
(hereinafter referred to as the Procedure Provisions), relevant issues concerning the further improvement of procedure for the application
and review of raising securities investment funds are hereby notified as follows:

1.

The China Securities Regulatory Commission (the CSRC) shall, after accepting the application for raising funds, decide on whether
to organize a fund expert review meeting to review the said application pursuant to the pertinent specific situations in connection
with the collection of funds.

For an application submitted to the review meeting attended by fund experts for the collection of funds, the reviewing experts shall
focus on the review of such aspects of funds as their investment management and risk control and independently give their own review
comments which shall be offered to the CSRC for reference.

2.

If a fund management company, which conducts standardized acts, has strong investment research capacities and wins good market evaluation,
shall not be required to submit its application for raising funds to the fund expert review meeting for review, except to the extent
of the following circumstances:

(1)

If the said company hasn’t been in operation for a full year from its establishment;

(2)

If the said company has greatly innovated the design for its fund products;

(3)

If the said design requires further improvement and reference to the review opinions given by the fund expert review meeting; and

(4)

any other circumstances as deemed necessary by the CSRC to be submitted to the fund expert review meeting for review based on the
principle of careful supervision.

3.

In case any greater innovation take place in the design of fund products, the CSRC shall give priority to arrangement of review conducted
by the fund expert review meeting and examination of application materials. If the innovation in fund products are significant, and
after the fund collection has been approved by the CSRC, other fund management companies shall, within a time limit stipulated by
the CSRC, be forbidden to reproduce or imitate such significant innovation.

4.

If an application for fund collection is found rough, ambiguous and incomplete respectively in connection with its design scheme,
operating thoughts for investment or risk control measures after examination, the fund management company filing such application
shall be ordered to make important amendments subject to the procedures laid down in Article 24 and 25 of the Procedure Provisions.
As to an application of the kind mentioned above, which has been submitted to the fund expert review meeting for review, a decision
shall also be made on whether or not such application shall be re-applied to the fund expert review meeting for review again based
on the specific situations after the said amendment.

5.

If there remains any issue in the application for fund collection which has been amended and submitted to the fund expert review meeting
for review, the CSRC shall not grant an approval to such application and adopt administrative supervision measures in compliance
with specific situations.

6.

Any lawyer or law firm producing legal opinions to the application for fund collection and offering legal services shall comply with
pertinent provisions, earnestly fulfill his or its responsibilities, check and verify pertinent materials and facts and ensure the
authenticity, accurateness and completeness of documents issued thereof.

7.

This Circular shall go into effect as of the date of promulgation.

China Securities Regulatory Commission

June 16, 2005



 
China Securities Regulatory Commission
2005-06-16

 






SUPPLEMENTARY NOTICE OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION ON THE POLICY RELATING TO THE INDIVIDUAL INCOME TAXES ON DIVIDENDS AND BONUSES

Ministry of Finance, State Administration of Taxation

Supplementary Notice of the Ministry of Finance and the State Administration of Taxation on the Policy Relating to the Individual
Income Taxes on Dividends and Bonuses

Cai Shui [2005] No. 107

The departments (bureaus) of public finance, bureaus of state taxation and local taxation of all provinces, autonomous regions, municipalities
directly under the Central Government and the cities under separate state planning and the public finance bureau of the Xinjiang
Production and Construction Corps:

For the purpose of further regulating the taxation policies of dividends and bonuses, and reinforcing tax revenue collection and management,
the implementation requirement on the exemption or reduction policies of individual income taxes concerning dividends and bonuses
is hereby notified as follows:

1.

For any income from dividend and bonuses as actually allotted by a listed company after the day of document Cai Shui [2005] No. 102
is distributed (including the very day of distribution), the reduction policies of individual income taxes shall be implemented according
to the provisions of document Cai Shui [2005] No. 102.

Those listed companies, which meet the aforesaid provisions and have paid individual income taxes in light of the full amount of dividends
and bonuses, may refund the excessive taxes as collected to individual investors according to the tax-reduction policies as prescribed
by document Cai Shui [2005] No. 102; where the tax amount has been turned in to the state treasury, it shall be refunded according
to the prescribed procedure by the taxation and public finance departments and shall be returned to individual investors by withholding
enterprises.

2.

For the incomes from dividend and bonuses of securities investment funds by allocation of a listed company, the taxable income shall
be calculated at a reduced rate of 50% when the withholding agent withholds the individual income taxes according to the provisions
of document Cai Shui [2005] No. 102.

3.

The term “listed companies” as mentioned in document Cai Shui [2005] No. 102 refers to the listed companies that are listed for the
transaction on the Shanghai Stock Exchange or Shenzhen Stock Exchange

Please implement it accordingly.

Ministry of Finance

State Administration of Taxation

June 24, 2005



 
Ministry of Finance, State Administration of Taxation
2005-06-24

 






RELEVANT ISSUES CONCERNING THE AMENDMENT TO THE OPERATIVE PROCEDURES OF FOREIGN EXCHANGE ADMINISTRATION IN OVERSEAS COMMODITY FUTURES HEDGING BUSINESS OF STATE-OWNED ENTERPRISES (FOR TRIAL IMPLEMENTATION)






State Administration of Foreign Exchange

Relevant Issues Concerning the Amendment to the Operative Procedures of Foreign Exchange Administration in Overseas Commodity Futures
Hedging Business of State-Owned Enterprises (For Trial Implementation)

Hui Fa [2005] No. 34

The branches and offices of the State Administration of Foreign Exchange of the People’s Republic of China (SAFE) in all provinces,
autonomous regions, municipalities directly under the Central Government, as well as the SAFE branches of municipalities of Shenzhen,
Dalian, Qingdao, Xiamen and Ningbo, as well as various head offices of designated foreign exchange banks with Chinese investment:

With a view to meeting the needs of the development of overseas commodity futures hedging business of state-owned enterprises, and
further regulating the administration of foreign exchange under commodity futures hedge, in according with pertinent provisions of
the Measures for the Administration of Overseas Futures Hedging Business of State-owned Enterprises (hereinafter referred to as the
Measures), relevant issues concerning the amendment to the Operative Procedures of Foreign Exchange Administration in Overseas Commodity
Futures Hedging Business of State-Owned Enterprises (For Trial Implementation) (hereinafter referred to as the Operative Procedures)
are hereby supplemented as follows:

1.

In Respect of the Confirmation of Risk Exposure and Its Administration

For an enterprise (hereinafter referred to as the enterprise) which has been granted a license of overseas commodity futures hedging
business as issued by the China Securities Regulatory Administration (hereinafter referred to as the CSRC) and has had its risk exposure
verified by the CSRC in the current year, it shall, if intending to apply for confirmation formality of risk exposure in the current
year, file an application to a local SAFE branch or office (hereinafter referred to as the local SAFE branch) for handling the formality
of risk exposure confirmation in the current year on presentation of the following materials:

(1)

a notice indicating the SAFE will verify risk exposure for an enterprise holding a license of overseas commodity futures hedging business
in the current year;

(2)

a written report showing the confirmation of the said enterprise for risk exposure in the current year, including the amount to be
applied for, development of import & export businesses under futures hedging business of the said enterprise, its preparation for
and present situation development of futures hedging business as well as the plan for the current year. Where it is not the first
time for the enterprise to file an application, utilization of risk exposure in the last year shall also be submitted; and

(3)

a bank statement of balance in the domestic special futures foreign exchange account by the end of last year or the end of preceding
month from the date of application.

The local SAFE branch shall report application materials to the SAFE within 7 working days from the receipt of all such materials
for the confirmation of the said enterprise’ risk exposure by the SAFE. The enterprise shall, within 1 month from receiving a confirmation
letter, apply to the local SAFE branch for dealing with the formalities of recordation and registration (modification) as well as
opening a foreign special futures account after being examined and approved.

Subject to the Measure, the aggregate of the enterprise’s deposits under futures and futures compensation amount as remitted accumulatively
in the current year, and the balance in its foreign futures special account by the end of last year shall not exceed the amount of
risk exposure confirmed in the current year. The enterprise shall present to the domestic opening bank a bank sheet of the balance
in its foreign special futures account by the end of last year, and such bank shall strictly control the amount of funds allowed
to be remitted by the said enterprise and handle well the registration of customs duty.

The enterprise may, within the scope of risk exposure confirmed by the SAFE, purchase foreign exchanges according to its demands as
the funds under overseas futures hedge.

2.

With Regard to the Administration of Domestic and Foreign Special Futures Accounts

In case the municipality where the enterprise is registered is different from that in which the local SAFE branch is located, a domestic
special futures account may be opened with a designated foreign exchange bank in a place where the said enterprises is registered
and the local SAFE branch in the same place shall also be responsible for the daily administration of foreign exchange. Except an
approval document of remitted initial deposit as set forth in Paragraph 2 of Article 4 hereof, an application for all other opinions
and official replies required to be made in written form shall, after initially examined by a SAFE central sub-branch in the place
where the enterprise is registered, be transmitted to a SAFE branch according to provisions.

Whereas the CSFC has made adjustment to approaches for the administration of the enterprises’ selection of overseas brokering institutions,
the material for examining an enterprise to open a foreign special futures account with the approval from local SAFE branch shall
be adjusted as: a written notice of the CSRC on the recordation filed by an enterprise with the CSRC concerning the foreign futures
brokering company under the selection of such enterprise.

3.

Permission to Enterprises for Retaining the Petty Cash Funds in a Certain Sum

As required by the business, local SAFE branch may ratify petty cash funds in foreign exchange at a certain rate in domestic and foreign
special futures accounts and retain such petty cash funds in the domestic special account for circulation and use, among which the
petty cash funds retainable in an foreign account shall refer to the petty cash funds other than those which must be retained by
any enterprise with a license for holding a position according to the requirements of any futures brokering institution. The aggregate
of upper limits of petty cash funds in foreign exchange retainable in a foreign special account at the same point in time shall not
exceed more than 30% of the amount of risk exposure in foreign exchange of the current year. Such aggregate shall be earmarked for
specified purpose only and be forbidden from appropriation.

4.

With Respect to the Administration of Initial Deposit Remittance

Any enterprise, if required to remit overseas the initial deposit under commodity futures, may apply to the opening bank for completing
the formality of initial deposit remittance on presentation of documents issued by the local SAFE for approving an application letter,
written agreement of account opening which is signed by the said enterprise and a foreign futures brokering company (institution)
that is approved by the local SAFE branch to open foreign special accounts. The accumulative amount of initial deposits remitted
in one year shall not exceed 20% of the amount of risk exposure in foreign exchange of the same year. If a rate higher than 20% is
required under special circumstances, such circumstances shall be firstly examined by the local SAFE branch and then reported to
the SAFE for approval.

In case an enterprise open a domestic special futures account with a bank of a place where it is registered, the initial deposit shall
be approved and remitted by the SAFE central sub-branch in the same place subject to the provisions mentioned above.

An enterprise must, within 1 month after the remittance of initial deposit, feed back to the local SAFE branch the receipt certificate
(Any of its original, duplicate, fax and email is acceptable.) which is affixed by the official seal of a collection brokering company.

5.

In View of the Feedback of Information and Date Statistics Thereof

Any enterprise and bank shall, within the first 10 working days in a month, be obliged to respectively submit to the local SAFE branch
the Monthly Report of Stock of Overseas Futures Hedging Foreign Exchange Funds (See Schedule 1 For Enterprises Use) of the preceding
month as well as the cash position statement issued by a domestic futures brokering institution from the end of last statement, with
an official seal of the said enterprise thereof (bank statement of balance); Monthly Report of Flow of Overseas Futures Hedging Foreign
Exchange Funds (Schedule 2 For Banks Use).

Any enterprise and bank shall be ordered to make rectification within a time limit by the local SAFE branch if failing to feed back
the date and information set out in Item 4 and 5 during a period without any justifiable reason; Where still failing to make rectification,
such enterprise and bank shall be imposed a penalty ranging from RMB 10 to 30 thousand yuan by the local SAFE branch according to
the seriousness of respective circumstances.

Subject to Article 5 of the Operative Procedures, the local SAFE branch shall, within 20 working dates from the end of each season,
report a Quarterly Report of Overseas Futures Hedging Foreign Exchange Funds (Schedule 3) of the current season in the form of disk
and written text to the SAFE.

6.

This Circular shall become effective as of the date of promulgation. For any business prior to such date, pertinent formalities such
as the application for limit of petty cash funds in foreign exchange deposited in foreign special futures account, shall be made
up within 1 month from the date of such promulgation. In case of any conflict between other provisions and provisions hereof, the
latter shall prevail. Anything not covered herein shall be subject to the Operative Procedures and the Circular of the State Administration
of Foreign Exchange on Several Issues Concerning the Opening Domestic Accounts in Foreign Exchange under Operative Procedures of
Foreign Exchange Administration in Overseas Commodity Futures Hedging Business of State-Owned Enterprises (For Trial Implementation).
Special circumstances shall be submitted to the SAFE for examination level by level.

Schedules:

1)

Monthly Report of Stock of Overseas Futures Hedging Foreign Exchange Funds (For Enterprises Use)

2)

Monthly Report of Flow of Overseas Futures Hedging Foreign Exchange Funds (For Banks Use)

3)

Quarterly Report of Overseas Futures Hedging Foreign Exchange Funds (For SAFE branches and offices)

State Administration of Foreign Exchange

May 17, 2005

htm/e04095.htmSchedule 1

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Schedule 1:

Monthly Report of Stock of Overseas Futures Hedging Foreign Exchange Funds (For Enterprises Use)

(Date of Filling￿￿￿￿)

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￿￿￿￿(Official Seal)￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿ ￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿Unit: Ten Thousand USD

Month

Balance of Risk Exposure

Limit of Petty Cash Funds Retainable in Domestic and Foreign Special Futures Accounts

Total Sum of Petty Cash Funds Having Been Retained in the Foreign Special Account by the End of Last Month

Balance in the Domestic Special Account by the End of Last Month

Total Sum of the Balance in the Foreign Special Account by the End of Last Month

Details of the Balance in the Foreign Special Account by the End of Last Month

1

2

3

4

5

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￿￿￿￿Responsible Person: ￿￿￿￿￿￿￿￿￿￿￿￿Contact Tel: ￿￿￿￿￿￿￿￿￿￿￿￿Handling Person: ￿￿￿￿￿￿￿￿￿￿￿￿Contact Tel:

￿￿￿￿Note: 

￿￿￿￿￿￿￿￿1. Details of the Balance in the Foreign Special Account by the End of Last Month: Any enterprise may, based on its own actual situations,
fill and report the information about the balance which is deposited in the account having been opened by a foreign futures brokering
company and has been approved by the SAFE branch.

￿￿￿￿￿￿￿￿2. Total Sum of the Balance in the Foreign Special Account by the End of Last Month= Item 1+Item2+Item3+Item4+Item5+Item￿￿￿￿. as Set
Forth in the Details of the Balance in the Foreign Special Account by the End of Last Month

 

Schedule 2:

Monthly Report of Flow of Overseas Futures Hedging Foreign Exchange Funds (For Banks Use)

 

￿￿￿￿Filling and Reporting Entity:￿￿(Official Seal)￿￿￿￿￿￿￿￿￿￿￿￿(Date of Filling:￿￿￿￿￿￿￿￿￿￿￿￿)￿￿￿￿￿￿￿￿￿￿￿￿Unit of Currency: Ten Thousand USD






Serial No.

Name of Enter- prise

Con- firmed Amount of Risk Expo-

sure in This Year

Balance of Risk Expo- sure by the End of

This Month

Domestic Account

Fund Flow

Balance in the Foreign Special Account by the End of Last Year

Re- marks

Ac- count No.

Balance by the End of Last Month

Amount Trans- ferred In for This Month

Amount of the Pur- chased Foreign Ex- change

Other Incomes of This Month

Expendi- tures of This Month

Amount of Settled Foreign Exchange

Balance by the End of This Month

Accumu- lative Expendi- tures of This Year

Bene- ficiary

Ac- count No.

Use

 

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CIRCULAR OF MINISTRY OF COMMERCE, CHINA EXPORT& CREDIT INSURANCE CORPORATION CONCERNING UTILIZING EXPORT CREDIT INSURANCE TO SUPPORT THE DEVELOPMENT OF NAME BRAND EXPORT

Ministry of Commerce, China Export& Credit Insurance Corporation

Circular of Ministry of Commerce, China Export& Credit Insurance Corporation concerning Utilizing Export Credit Insurance to Support
the Development of Name Brand Export

Shang Mao Fa [2005] No. 332

In order to implement the spirit of the Central Committee of the People’s Republic of China and the State Council on accelerating
the cultivation of world famous name brand, implement the Directive Opinions on Supporting the Development of Name Brand Export (Shang
Mao Fa [2005] No. 124) issued by eight ministries including the Ministry of Commerce, accelerate the cultivation of autonomous name
brand cultivation, transform the increase mode of foreign trade, realize the sustainable development of foreign trade, the Ministry
of Commerce and China Export& Credit Insurance Corporation hereby notify the matters concerned utilizing foreign credit insurance
to support the development of name brand export as follows:

1.

The authorities in charge of commerce of all regions and the all the business offices of China Export& Credit Insurance Corporation
(hereinafter referred to as “Sinosure”) shall communicate with each other in time, understand the demand of the enterprises and study
the detailed measures concerning utilizing export credit insurance to support the development of name brand export.

2.

The authorities in charge of commerce of all regions shall coordinate with the local business offices of Sinosure to publicize the
functions of export credit insurance policy, encourage the enterprises listed in “name brand export under the preferred cultivation
and development” (hereinafter referred to as “name brand export enterprise”) to utilize export credit to develop international market
and internationalized operation.

3.

The business offices of Sinosure shall formulate special service plan for the name brand export enterprises within its jurisdiction,
giving specific support and reporting the relevant circumstances to the local authorities in charge of commerce.

4.

Where the name brand export enterprise is covered in export credit insurance, Sinosure shall, in accordance with the service life
hereof, render hereto the qualification of “preferred client” or “key client” enjoying the relevant supporting policy.

5.

Sinosure shall, by such new products as overseas investment insurance, overseas labor service insurance, provide preferential service
to name brand export enterprises for their establishment of research and development center, production base and marketing network

6.

Sinosure shall provide name brand export enterprises with such value-added services as national risk report, industrial analysis report
and risk management recommendation, appropriately provide more free or preferential credit information report, give priority to the
arrangement of “Sinosure Online” business operation and service system.

7.

Sinosure shall actively development new products, exploring new modes to provide insurance credit support in such linkages as production
originality and research& development, name brand marketing and extension, patent acquisition and protection.

8.

Such means as “special issues shall be solved specially in time” shall be taken to meet the individuation demand of the name brand
export enterprises.

All the units are required to comply with the spirit of the Circular in the process of their implementation. Once problems occur,
they shall inform the Ministry of Commerce (Department of Foreign Trade) and China Export& Credit Insurance Corporation (Department
of Business Development)

The Circular is hereby given.

Ministry of Commerce

China Export& Credit Insurance Corporation

June 24, 2005

 
Ministry of Commerce, China Export& Credit Insurance Corporation
2005-06-24

 



LETTER OF REPLY OF THE GENERAL OFFICE OF THE STATE COUNCIL REGARDING THE ESTABLISHMENT OF NEW EXPORT PROCESSING ZONES INCLUDING SHANGHAI JIADING

General Office of the State Council

Letter of Reply of the General Office of the State Council regarding the Establishment of New Export Processing Zones including Shanghai
Jiading

Guo Ban Han [2005] No. 53

The General Administration of Custom,

Your “Proposal on the Establishment of New Export Processing Zones” [Shu Jia Fa [2005] No. 204] has been received and approved by
the State Council, and we hereby release our response as follows:

1.

The establishment of following new export processing zones has been approved: Shanghai Jiading export processing zone, Guangdong Nansha
export processing zone, Huizhou export processing zone, Yunnan Kunming export processing zone, Jiangshu Changzhou export processing
zone, Wuzhong export processing zone, Wujiang export processing zone, Yangzhou export processing zone, Changshu export processing
zone, Sichuan Mianyang export processing zone, Liaoning Shenyang (Zhangshi) export processing zone, Jiangxi Jiujiang export processing
zone, Hebei Langfang export processing zone, Hunan Chenzhou export processing zone, Zhejiang Cixi export processing zone, Fujian
Fuzhou export processing zone, Fuqing export processing zone and Quanzhou export processing zone.

2.

The construction of the above-listed export processing zones shall be carried out in strict compliance with stipulations in the “General
Office of the State Council Response regarding the Establishment of Pilot Export Processing Zones” (Guo Ban Han [2000] No. 37). Each
export processing zone shall plan and construct strictly within the four boundaries (see attachment) approved. You shall notify relevant
local people’s governments for earnest preparation work and join with relevant ministries for examination and acceptance after they
become eligible. In consideration of the fact that the provincial development zones in which the nine export processing zones of
Jiangshu Wuzhong, Wujiang, Yangzhou, Changshu, Jiangxi Jiujiang, Hebei Langfang, Hunan Chenzhou, Zhejiang Cixi and Fujian Quanzhou
are located have not passed the national elimination and rectification of development zones, you shall notify relevant local people’s
governments to submit their detailed construction plans for the joint examination and approval by the State Development and Reform
Commission and yourself before the commencement of construction, and after the completion of examination and acceptance of relevant
provincial development zones and with the confirmation of the location of export processing zones inside the provincial development
zones.

3.

You shall, together with other ministries, by drawing on past experiences, perfecting the entry and exit mechanism of export processing
zones and formulating detailed operative procedures, evaluate the developmental conditions of the established export processing zones,
and promote the healthy and orderly development of export processing zones. In the meantime, you shall study and take measures to
introduce into export processing zones the eligible new trade projects involving the processing of imported raw materials for the
concentrated regulatory administration on processing trade, preventing the construction of redundant projects and enhancing the quality
of work.

General office of the State Council

June 3, 2005

 
General Office of the State Council
2005-06-03

 



1234Page 3 of 4

CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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