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1986

PROCEDURES FOR THE REGISTRARTION AND ADMINISTRATION OF CHINESE-FOREIGN JOINT VENTURES

Procedures of the PRC for the Registrartion and Administration of Chinese-Foreign Joint Ventures

    

(Promulgated by the State Council on and Effective as of July 26, 1980)

   Article 1.

In accordance with the provisions of the Law of the People’s Republic of China on Chinese-Foreign Joint Ventures, these Procedures
are formulated in order to carry out the registration and administration of Chinese-foreign joint ventures and to safeguard their
lawful operations.

   Article 2.

A Chinese-foreign joint venture that has been approved by the Foreign Investment Commission of the People’s Republic of China shall,
within one month after approval, register with the General Administration for Industry and Commerce of the People’s Republic of China.

The General Administration for Industry and Commerce of the People’s Republic of China shall authorize the administrative bureaus
for industry and commerce of the provinces, autonomous regions and municipalities directly under the central authority to handle
registration procedures for Chinese-foreign joint ventures within the areas under their jurisdiction, and business license shall
be issued after examination and approval by the General Administration for Industry and Commerce of the People’s Republic of China.

   Article 3.

A Chinese-foreign joint venture that applies for registration shall present the following documents:

(1) The document of approval issued by the Foreign Investment Commission of the People’s Republic of China;

(2) Three copies each of the Chinese and foreign language texts of the joint venture agreement and contract signed by the parties
to the joint venture and its articles of association; and

(3) A copy of the business license or other documents issued by the competent department of the government of the country (or region)
from which the foreign joint venturer(s) come.

   Article 4.

When a Chinese-foreign joint venture applies for registration, it shall fill out three copies each of a registration form in Chinese
and a foreign language. The main items of registration shall be: the name of the venture, the address, the scope of production and
operation, the form of production and operation, the registered capital and the proportion to be provided by each party to the joint
venture, the chairman and vice- chairman of the board of directors, the president and vice-presidents or the factory manager and
deputy factory managers, the number and date of the document of approval, the total number of staff and workers and the number of
staff and workers of foreign nationality.

   Article 5.

From the date it is issued its business license, a Chinese-foreign joint venture shall be regarded as formally established, and its
legitimate production and operation activities shall be protected by the laws of the People’s Republic of China.

Unregistered enterprises shall not be permitted to go into operation.

   Article 6.

A Chinese-foreign joint venture shall, upon presenting its business license, open an account with the Bank of China or a bank approved
by the Bank of China and register with the local tax authorities for the payment of taxes.

   Article 7.

When a Chinese-foreign joint venture desires to move to a new site, change its line of production, increase, decrease of assign the
registered capital or extend the contract period, it shall, within one month after approval by the Foreign Investment Commission
of the People’s Republic of China go through procedures for registering the changes with the administrative bureau for industry and
commerce of the province, autonomous region or municipality directly under the central authority where it is located.

When there are changes in other registered items, they shall be reported in writing at the end of the year to the administrative bureau
for industry and commerce of the province, autonomous region or municipality directly under the central authority where the joint
venture is located.

   Article 8.

When a Chinese-foreign joint venture registers or modifies its registration, it shall pay a registration fee or a fee for modification
of registration, the amount of which shall be stipulated by the General Administration for Industry and Commerce of the People’s
Republic of China.

   Article 9.

A Chinese-foreign joint venture, upon the expiration of the contract period or upon termination of the contract before the date of
expiration, shall go through procedures for nullifying its registration by presenting the document of approval, issued by the Foreign
Investment Commission of the People’s Republic of China, to the administrative bureau for industry and commerce of the province,
autonomous region or municipalities directly under the central authority where it is located and, after examination and approval
by the General Administration for Industry and Commerce of the People’s Republic of China, hand in its business license for cancellation.

   Article 10.

The General Administration for Industry and Commerce of the People’s Republic of China and the administrative bureaus for industry
and commerce of the provinces, autonomous regions and municipalities directly under the central authority have the right to supervise
and inspect the Chinese-foreign joint ventures within the area under their jurisdiction. Violators of these Procedures shall be given
a warning or a fine in accordance with the seriousness of each case.

   Article 11.

These Procedures shall go into effect on the day they are promulgated.

(The English translations are for reference only)

    





ANNOUNCEMENT OF THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE OF THE PEOPLE’S REPUBLIC OF CHINA CONCERNING REGISTRATION OF RESIDENT REPRESENTATIVE OFFICES OF FOREIGN ENTERPRISES

The State Administration for Industry and Commerce

Announcement of the State Administration for Industry and Commerce of the People’s Republic of China Concerning Registration of Resident
Representative Offices of Foreign Enterprises

the State Administration for Industry and Commerce

December 8,1980

“Interim Provisions of the People’s Republic of China Concerning the Control of Resident Representative Offices of Foreign Enterprises”
(referred to hereafter as “Interim Provisions”) has been promulgated and gone into effect. Now the Announcement Concerning Registration
Reads as follows:

(1)

In accordance with the “Interim Provisions”, a resident representative office or a resident representative, when approved by the proper
ministries and departments under the State Council, comes to the General Administration for registration procedures. In order to
facilitate the resident representative offices or resident representatives to go through the registration procedures in their localities,
the General Administration has authorized the administrative bureaus for industry and commerce in various provinces, municipalities
directly under the Central Government and autonomous regions to undertake registration procedures on its behalf.

(2)

A resident representative office or a resident representative, when approved by the proper ministries and departments under the State
Council before the promulgation of the “Interim Provisions”, must, by December 20, 1980, go to the administrative bureaus for industry
and commerce in various provinces, municipalities directly under the Central Government and autonomous regions in their localities
on the strength of the approval documents issued by the various proper ministries and departments and duplicates or photocopies of
the documents listed in Article 3 of the “Interim Provisions” and go through the registration procedures and it will be granted
a “Registration Certificate of Resident Representative Office of Foreign Enterprise” by the General Administration for Industry and
Commerce of the People’s Republic of China.

(3)

A resident representative office or a resident representative of an overseas Chinese, Hongkong or Macao enterprise that has been approved
by the proper ministries and departments under the State Council or granted approval after the issuance of the Announcement, shall
also go through registration procedures in accordance with the “Interim Provisions” and be granted a “Registration Certificate of
Resident Representative Office of the Overseas Chinese, Hongkong or Macao Enterprise” by the General Administration for Industry
and Commerce of the People’s Republic of China.

(4)

A resident representative office or a resident representative that has been approved by the provincial, municipal or autonomous regional
people’s government or the proper departments under them, shall register with the administrative bureaus for industry and commerce
in the provinces, municipalities directly under the Central Government or autonomous regions in accordance with the provisions of
the provinces, municipalities directly under the Central Government or autonomous regions, and go through registration procedures
and secure a “Registration Certificate of Resident Representative Office of Foreign Enterprise” issued by the administrative bureaus
for industry and commerce in provinces, municipalities directly under the Central Government or autonomous regions.

(5)

When an approved resident representative office or an approved resident representative of a foreign enterprise goes through registration
formalities, it should pay the registration fee of RMB 600 yuan. When going through the procedure of renewing the registration certificate,
it should pay the registration fee of RMB 300 yuan. When going through the procedure for effecting a change in registration, it should
pay the fee of RMB 100 yuan.

(6)

The period of validity of the “Registration Certificate of Resident Representative Office of Foreign Enterprise” is the duration period
of the resident approved. Exceeding the period, it should go through the registration procedures again. With a resident period longer
than one year, it goes through registration procedures once every year.



 
The State Administration for Industry and Commerce
1980-12-08

 






CRIMINAL LAW OF THE PEOPLE’S REPUBLIC OF CHINA

The National People’s Congress

Order of the President of the People’s Republic of China

No.83

The Criminal Law of the People’s Republic of China has been revised at the Second Session of the Fifth National People’s Congress
on March 14, 1997, hereby promulgate the revised edition, and shall enter into force as of October 1, 1997.

President of the People’s Republic of China: Jiang Zemin

March 14, 1997

Criminal Law of the People’s Republic of China ContentsPart 1 General Provisions

Chapter I The Tasks, Basic Principles and Scope of Application of the

Criminal Law

Chapter II Crimes

Section 1 Crimes and Criminal Responsibility

Section 2 Preparation for a Crime, Criminal Attempt and Discontinuation

of a Crime

Section 3 Joint Crimes

Section 4 Crimes committed by a unit

Chapter III Punishments

Section 1 Types of Punishments

Section 2 Public Surveillance

Section 3 Criminal Detention

Section 4 Fixed-term Imprisonment and Life Imprisonment

Section 5 The Death Penalty

Section 6 Fines

Section 7 Deprivation of Political Rights

Section 8 Confiscation of Property

Chapter IV The Concrete Application of Punishments

Section 1 Sentencing

Section 2 Recidivists

Section 3 Voluntary Surrender and Rendering Meritorious Service

Section 4 Combined Punishment for Several Crimes

Section 5 Suspension of Sentence

Section 6 Commutation of Punishment

Section 7 Parole

Section 8 Limitation

Chapter V Other Provisions Part 2 Specific Provisions

Chapter I Crimes of Endangering the State Security

Chapter II Crimes of Endangering Public Security

Chapter III Crimes of Undermining the Socialist Market Economic Order

Section 1 Crimes of Production and Sale of Fake or Substandard

Commodities

Section 2 Crimes of Smuggling

Section 3 Crimes of Impairing Order of Administering upon Companies

and Enterprises

Section 4 Crimes of Undermining Order of Administering upon Banking

Section 5 Crimes of Financial Fraud

Section 6 Crimes of Endangering Taxes Collection and Administration

Section 7 Crimes of Infringing upon Intellectual Property Rights

Section 8 Crimes of Disturbing Market Order

Chapter IV Crimes of Infringing upon the Rights of the Person and the

Democratic Rights of Citizens

Chapter V Crimes of Property Violation

Chapter VI Crimes of Obstructing the Administration of Public Order

Section 1 Crimes of Disturbing Public Order

Section 2 Crimes of Impairing Judicial Activities

Section 3 Crimes of Impairing Regulations of National Boundary

(Borderline)

Section 4 Crimes of Impairing Regulations of Cultural Relics

Section 5 Crimes of Endangering Public Health

Section 6 Crimes of Undermining Protection of Environmental Resource

Section 7 Crimes of Smuggling, Trafficking in, Transporting and

Manufacturing Narcotic Drugs

Section 8 Crimes of Organizing, Forcing, Luring, Sheltering and

Introducing Women into Prostitution

Section 9 Crimes of Manufacturing, Trafficking in and Disseminating

Pornographic Articles

Chapter VII Crimes of Endangering Interests of National Defence

Chapter VIII Crimes of Embezzlement and Bribery

Chapter IX Crimes of Dereliction of Duty

Chapter X Crimes Contrary to Duties Committed by Servicemen

Supplementary Provisions

Part 1 General Provisions

Chapter I The Tasks, Basic Principles and Scope of Application of the Criminal Law

Article 1

This Law is formulated with a view to punishing crimes and protecting the people, and in accordance with the Constitution, and in
the light of the concrete experiences in fighting against crimes and the actual circumstances.

Article 2

The tasks of the Criminal Law of the People’s Republic of China are to use criminal punishments to fight against all criminal acts
in order to defend the security of the State; to defend the political power of the people’s dictatorship and socialist system; to
protect property owned by the State and the property collectively owned by the working people; to protect the citizens’ privately
owned property; to protect the citizens’ rights of the person and their democratic and other rights; to maintain public order and
economical order, and to safeguard the smooth progress of the cause of the socialist revolution and socialist construction.

Article 3

Where an act is expressly defined in laws as a criminal act, it shall be determined and punished as a criminal act in accordance with
the law; where an act is not expressly defined in the laws as a criminal act, it shall not be determined and punished as a criminal
act.

Article 4

Anyone who commit a crime shall be equal in applying the law. No one is privileged to be beyond the law.

Article 5

The lightness or heaviness of the punishments shall be in accordance with the criminal acts and the criminal responsibility of the
criminals.

Article 6

This Law is applicable to anyone who commits a crime within the territory of the People’s Republic of China, unless the case is covered
by special legal provisions.

This Law is also applicable to anyone who commits a crime on board a ship or an aircraft of the People’s Republic of China.

If the criminal act or its consequence takes place within the territory of the People’s Republic of China, the crime shall be deemed
to have been committed within the territory of the People’s Republic of China.

Article 7

This Law is applicable to the citizens of the People’s Republic of China who commit crimes prescribed in this Law outside the territory
of the People’s Republic of China; however, they may not be investigated if for those crimes this Law prescribes a maximum punishment
of fixed-term imprisonment of not more than three years.

This Law is applicable to state functionaries and servicemen of the People’s Republic of China who commit crimes outside the territory
of the People’s Republic of China.

Article 8

This Law may be applicable to any foreigner who commits a crime outside the territory of the People’s Republic of China, against the
state of the People’s Republic of China or against its citizens, if for that crime this Law prescribes a minimum punishment of fixed-term
imprisonment of not less than three years; however, this does not apply to a crime that is not punishable according to the law of
the place where it was committed.

Article 9

This Law is applicable to the crimes prescribed in the international treaties concluded or acceded to by the People’s Republic of
China and over which the People’s Republic of China has criminal jurisdiction within its obligation in accordance with the treaties.

Article 10

If any person commits a crime outside the territory of the People’s Republic of China for which according to this Law he would bear
criminal responsibility, he may still be dealt with according to this Law, even if he has already been tried in a foreign country.
However, if he has already received criminal punishment in the foreign country, he may be exempted from punishment or given a mitigated
punishment.

Article 11

The criminal responsibility of foreigners who enjoy diplomatic privileges and immunities shall be resolved through diplomatic channels.

Article 12

If an act committed after the founding of the People’s Republic of China and before the entry into force of this Law was not deemed
a crime under the laws in force at the time, those laws shall apply. If the act was deemed a crime under the laws in force at that
time and is subject to prosecution under the provisions of Section 8, Chapter IV of the General Provisions of this Law, criminal
responsibility shall be investigated according to those laws. However, if this Law does not deem it a crime or imposes a lighter
punishment, this Law shall apply.

The effective judgments made in accordance with the laws in force at that time before the entry into force of this Law, shall keep
their effectiveness.

Chapter II Crimes

Section 1 Crimes and Criminal Responsibility

Article 13

A crime refers to an act that endangers the sovereignty and territorial integrity and security of the state; dismembers the state
and subverts the political power of the people’s dictatorship and overthrows the socialist system; disrupts social order and economic
order; violates property owned by the state or collectively owned by the working people; violates the citizens’ privately owned property
or infringes upon the citizens’ rights of the person and their democratic and other rights; and any other act that endangers society
and is punishable according to law. However, an act that is clearly of minor importance and little harm shall not be considered a
crime.

Article 14

An intentional crime refers to a crime committed by a person who clearly knows that his act will produce socially dangerous consequences
but who wishes or allows such consequences to occur.

Criminal responsibility shall be borne for intentional crimes.

Article 15

A negligent crime refers to a crime committed by a person who should have foreseen that his act would possibly produce socially dangerous
consequences but who fails to do so through negligence or, having foreseen the consequences, readily believes that they can be avoided,
the result being that these consequences do occur.

Criminal responsibility shall be borne for negligent crimes only when the law so provides.

Article 16

If an act in fact results in harmful consequences due to unavoidable or unforeseeable causes rather than intent or negligence, it
shall not be a crime.

Article 17

Any person who has reached the age of 16 and who commits a crime shall bear criminal responsibility.

Any person who has reached the age of 14 but not the age of 16 and who commits homicide, intentionally injuring another person resulting
in serious bodily injury or death, rape, robbery, selling narcotic drugs, arson, causing explosion, or spreading poisons, shall bear
criminal responsibility.

Any person who has reached the age of 14 but not the age of 18 and who commits a crime shall be given a lighter or mitigated punishment.

If a person is not punished because he has not reached the age of 16, the head of his family or his guardian shall be ordered to discipline
and educate him. When necessary, he may also be taken in by the government for reeducation.

Article 18

If a mental patient causes dangerous consequences at a time when he is unable to recognize or control his own conduct, and such a
circumstance is confirmed by a forensic doctor, he shall not bear criminal responsibility, but his family members or guardian shall
be ordered to keep him under strict surveillance and arrange for his medical treatment. When necessary, he may also be arranged for
medical treatment under coercion by the government.

Any person whose mental illness is of an intermittent nature shall bear criminal responsibility if he commits a crime when he is in
a normal mental state.

Any mental patient who does not lose completely the ability to recognize or control his own conduct and commits a crime shall bear
criminal responsibility, but he may be given a lighter or mitigated punishment.

Any intoxicated person who commits a crime shall bear criminal responsibility.

Article 19

Any deaf-mute or blind person who commits a crime may be given a lighter or mitigated punishment or be exempted from punishment.

Article 20

Where a person conducts an act to stop an unlawful infringement in order to avert an immediate and unlawful infringement of the state’s
interest or of the public interest or of his own or another person’s rights of the person, or property rights, or other rights, resulting
in harm to the unlawful infringer, such an act shall be justifiable defence, and criminal responsibility shall not be borne for such
an act.

Criminal responsibility shall be borne if justifiable defence apparently exceeds the limits of necessity and causes serious harm;
however, a mitigated punishment or exemption from punishment shall be given.

Where a defence is conducted to an immediate violent crime of committing physical assault, committing homicide, robbery, rape, kidnapping,
and other crimes seriously endangering the security of a person, and it causes bodily injury or death to the unlawful infringer,
such an act shall not be defence that exceeds the limits of necessity, and criminal responsibility shall not be borne for such an
act.

Article 21

Criminal responsibility shall not be borne for an act that a person is compelled to commit in an emergency to avert an immediate danger
to the state’s interest or the public interest or to his own or another person’s rights of the person or property rights or other
rights, and that causes harm.

Criminal responsibility shall be borne if an act committed in an emergency to avert danger exceeds the limits of necessity and causes
undue harm; however, a mitigated punishment or exemption from punishment shall be given.

The provisions of the first paragraph of this Article with respect to averting danger to oneself shall not apply to a person who is
charged with specific responsibility in his post or profession.

Section 2 Preparation for a Crime, Criminal Attempt and Discontinuation of a Crime

Article 22

Preparation for a crime refers to the preparation of the instruments or the creation of the conditions for a crime.

An offender who prepares for a crime may, in comparison with one who completed the crime, be given a lighter or mitigated punishment
or be exempted from punishment.

Article 23

A criminal attempt refers to a case where an offender has already begun to commit a crime but is prevented from completing it for
reasons independent of his will.

An offender who attempts to commit a crime may, in comparison with one who completed the crime, be given a lighter or mitigated punishment.

Article 24

Discontinuation of a crime refers to cases where, in the process of committing a crime, the offender voluntarily quits continuing
the crime or voluntarily and effectively prevents the consequences of the crime from occurring.

Where an offender who discontinues a crime and causes no harm, exempted from punishment shall be given; where an offender causes harm,
a mitigated punishment shall be given.

Section 3 Joint Crimes

Article 25

A joint crime refers to an intentional crime committed by two or more persons jointly.

A negligent crime committed by two or more persons jointly shall not be punished as a joint crime; those who should bear criminal
responsibility shall be individually punished according to the crimes they have committed.

Article 26

A principal criminal refers to any person who organizes and leads a criminal group in carrying out criminal activities or plays a
principal role in a joint crime.

A criminal group refers to any relatively stable criminal organization which is composed of more than three persons for the purpose
of committing a crime jointly.

A ringleader who organizes and leads a criminal group shall be given a punishment according to all the crimes the group has committed.

A principal criminal unless otherwise stipulated in the third paragraph shall be given a punishment according to all the crimes that
he participates in or organizes or commands.

Article 27

An accomplice refers to any person who plays a secondary or auxiliary role in a joint crime.

An accomplice shall be given a lighter or mitigated punishment or be exempted from punishment.

Article 28

A person who is compelled to participate in a crime shall, according to the circumstances of his crime, be given a mitigated punishment
or be exempted from punishment.

Article 29

A person who instigates others to commit a crime shall be punished according to the role he has played in the joint crime. Anyone
who instigates a person under the age of 18 to commit a crime shall be given a heavier punishment.

If the instigated person has not committed the instigated crime, the instigator may be given a lighter or mitigated punishment.

Section 4 Crimes Committed by a Unit

Article 30

A company, enterprise, institution, organ, or public organization that conducts an act harmful to society, where such an act is stipulated
as a crime, shall bear criminal responsibility.

Article 31

A unit which commits a crime shall be punished with a fine, and the person(s) directly in charge and other person(s) directly involved
in the crime shall be given a punishment. Where Specific Provisions of this Law or other laws stipulate otherwise, such stipulation
shall be applied.

Chapter III Punishments

Section 1 Types of Punishments

Article 32

Punishments are divided into principal punishments and supplementary punishments.

Article 33

The principal punishments are as follows:

(1)

public surveillance;

(2)

criminal detention;

(3)

fixed-term imprisonment;

(4)

life imprisonment; and

(5)

the death penalty.

Article 34

The supplementary punishments are as follows:

(1)

fines;

(2)

deprivation of political rights; and

(3)

confiscation of property.

Supplementary punishments may be imposed independently.

Article 35

Deportation may be imposed independently or supplementarily to a foreigner who commits a crime.

Article 36

If a victim has suffered economic losses as a result of a crime, the criminal shall, in addition to receiving a criminal sanction
according to law, be sentenced to make compensation for the economic losses in the light of the circumstances.

If a criminal who bears civil responsibility and is punished with a fine in the meantime, has no enough property to pay off, or is
punished with confiscation of property, he shall first bear responsibility of civil compensation to the victim.

Article 37

If the circumstances of a person’s crime are minor and do not require punishment, he may be exempted from criminal sanctions; however,
he may, according to the different circumstances of each case, be reprimanded or ordered to make a statement of repentance, offer
an apology, pay compensation for the losses or be subject to administrative punishment or administrative sanctions by the competent
department.

Section 2 Public Surveillance(*1)

Article 38

The term of public surveillance shall not be less than three months and not more than two years.

Where a criminal is sentenced to public surveillance, his sentence shall be executed by a public security organ.

Article 39

A criminal who is sentenced to public surveillance must observe the following rules during the term in which his sentence is being
executed:

(1)

observe laws and administrative regulations, submit to supervision;

(2)

forbidden to exercise the rights of freedom of speech, of the press, of assembly, of association, of procession and of demonstration
without approval of the public organ;

(3)

report on his own activities according to the demand of the organ executing the public surveillance;

(4)

observe the stipulation on meeting with guests by the organ executing the public surveillance; and

(5)

report and obtain approval from the organ executing public surveillance for departure from the county or city where he lives or change
in residence.

Criminals sentenced to public surveillance shall, while engaged in labour, receive equal pay for equal work.

Article 40

Upon the expiration of a term of public surveillance, the executing organ shall immediately announce the termination of public surveillance
to the criminal sentenced to public surveillance and to his unit or the masses of the place of his residence.

Article 41

A term of public surveillance shall be counted from the date the judgment begins to be executed; if the criminal is held in custody
before the execution of the judgment, each day spent in custody shall be considered as two days of the term sentenced.

Section 3 Criminal Detention

Article 42

A term of criminal detention shall not be less than 1 months and not more than 6 months.

Article 43

Where a criminal is sentenced to criminal detention, his sentence shall be executed by the public security organ in the vicinity.

During the period of execution, a criminal sentenced to criminal detention may go home for one to two days each month; an appropriate
remuneration may be given to those who participate in labour.

Article 44

A term of criminal detention shall be counted from the date the judgment begins to be executed; if the criminal is held in custody
before the execution of the judgment, each day in custody shall be considered as one day of the term sentenced.

Section 4 Fixed-Term Imprisonment and Life Imprisonment

Article 45

A term of fixed-term imprisonment, unless otherwise stipulated in Article 50 and Article 69 , shall not be less than 6 months and
not more than 15 years.

Article 46

A criminal sentenced to fixed-term imprisonment or life imprisonment shall serve his sentence in prison or another place for execution.
Anyone who is able to work shall participate in labour, and accepts education and reform.

Article 47

A term of fixed-term imprisonment shall be counted from the date the judgment begins to be executed; if the criminal is held in custody
before the execution of the judgment, each day in custody shall be considered as one day of the term sentenced.

Section 5 The Death Penalty

Article 48

The death penalty shall only be applied to criminals who have committed the most heinous crimes. If the immediate execution of a criminal
punishable by death is not deemed necessary, a two-year suspension of execution may be pronounced simultaneously with the imposition
of the death sentence.

All death sentences except for those that according to law should be decided by the Supreme People’s Court, shall be submitted to
the Supreme People’s Court for approval. Death sentences with a suspension of execution may be decided or approved by a higher people’s
court.

Article 49

The death penalty shall not be imposed on persons who had not reached the age of 18 at the time the crime was committed or to women
who are pregnant at the time of trial.

Article 50

If a person sentenced to death with a suspension of execution does not commit an intentional crime during the period of suspension,
his punishment shall be commuted to life imprisonment upon the expiration of that two-year period; if he performs great meritorious
service, his punishment shall be commuted to fixed-term imprisonment of not less than 15 years and not more than 20 years upon the
expiration of that two-year period; if it is verified that be has committed an intentional crime, the death penalty shall be executed
upon the approval of the Supreme People’s Court.

Article 51

The term of suspension of execution of a death penalty shall be counted from the date the judgment becomes final. The term of a fixed-term
imprisonment that is commuted from a death penalty with suspension of execution shall be counted from the date of expiration of the
term of suspension of execution of a death.

Section 6 Fines

Article 52

The amount of any fine imposed shall be determined according to the circumstances of the crime.

Article 53

A fine may be paid in a lump sum or in installments within the time limit specified in the judgment. If a fine is not paid upon the
expiration of that time limit, the payment shall be compelled. If a person is unable to pay all the fine, a people’s court shall,
when it finds that the person subjected to execution has any other property, pursue the payment at any time. If a person has true
difficulties in paying because of an unavoidable disaster, the fine may be reduced or remitted according to the circumstances.

Section 7 Deprivation of Political Rights

Article 54

Deprivation of political rights refers to deprivation of the following rights:

(1)

the right to vote and to stand for election;

(2)

the rights of freedom of speech, of the press, of assembly, of association, of procession, and of demonstration;

(3)

the right to hold a position in a state organ; and

(4)

the right to hold a leading position in any state-owned company or enterprise, institution or people’s organization.

Article 55

A term of deprivation of political rights shall not be less than one year and not more than five years, except as stipulated in Article
57 of this Law.

If a person sentenced to public surveillance is deprived of political rights as a supplementary punishment, the term of deprivation
of political rights shall be the same as the term of public surveillance, and the punishments shall be executed simultaneously.

Article 56

Criminals who commit crimes of endangering the state security shall be sentenced to deprivation of political rights as a supplementary
punishment; Criminals who commit crimes of intentional homicide, rape, arson, causing explosion, spreading poisons, robbery and other
crimes which seriously undermine public order may also be sentenced to deprivation of political rights as a supplementary punishment.

If deprivation of political rights is imposed independently, stipulation of the Specific Provisions of this Law shall be applied.

Article 57

Criminals who are sentenced to death or to life imprisonment shall be deprived of political rights for life.

If a death penalty with a suspension of execution is commuted to a fixed-term imprisonment, or a life imprisonment is commuted to
a fixed-term imprisonment, the term of the supplementary punishment of deprivation of political rights shall be changed to not less
than three years and not more than ten years.

Article 58

A term of deprivation of political rights as a supplementary punishment shall be counted from the date on which imprisonment or criminal
detention ends or from the date on which parole begins. Deprivation of political rights shall of course be in effect during the period
in which the principal punishment is being executed.

Criminals who are sentenced to deprivation of political rights shall observe laws and administrative regulations and relevant stipulations
on supervision and administration promulgated by the Department of Public Security under the State Council, submit to supervision;
and shall not exercise the rights of freedom stipulated in Article 54 of this Law.

Section 8 Confiscation of Property

Article 59

Confiscation of property refers to the confiscation of part or all of the property personally owned by a criminal. When all of the
property of a criminal is confiscated, necessaries of life for the criminal and his dependent family members shall be left out.

When a sentence of confiscation of property is imposed, property that the criminal’s family members own or should own shall not be
subject to confiscation.

Article 60

If it is necessary to use a confiscated property to repay legitimate debts that the criminal incurred before his property is confiscated,
such debts shall be paid at the request of the creditors.

Chapter IV The Concrete Application of Punishments

Section 1 Sentencing

Article 61

When sentencing a criminal, a punishment shall be imposed based on the facts, nature and circumstances of the crime, the degree of
harm done to society and the relevant provisions of this Law.

Article 62

In cases where the circumstances of a crime call for a heavier or a lighter punishment under the provisions of this Law, the criminal
shall be sentenced to a punishment within the limits of the prescribed punishment.

Article 63

In cases where the circumstances of a crime call for a mitigated punishment under the provisions of this Law, the criminal shall be
sentenced to a punishment less than the prescribed punishment.

Even if the circumstances of a crime do not warrant a mitigated punishment under the provisions of this Law, the criminal may, upon
approval of the Supreme People’s Court, be sentenced to a punishment less than the prescribed punishment according to the special
particulars of the case.

Article 64

All property illegally obtained by a criminal shall be recovered, or compensation shall be ordered. Legal property of the victim shall
be returned. Contrabands and possessions of the criminal that were used in the crime shall be confiscated. The property confiscated
and fine shall be turned over to the State Treasury, and shall not be misappropriated or disposed without authorization.

Section 2 Recidivists

Article 65

If a criminal commits another crime punishable by fixed-term imprisonment or heavier penalty within five years after serving his sentence
of not less than fixed-term imprisonment or receiving a pardon, he is a recidivist and shall be given a heavier punishment. However,
this shall not apply to cases of negligent crime.

For criminals who are paroled, the period stipulated in the preceding paragraph shall be counted from the date the parole expires.

Article 66

A criminal who has committed a crime of endangering the state’s security at any time after serving his sentence or receiving a pardon
shall, if he commits another crime of endangering the state’s security, be dealt with as a recidivist.

Section 3 Voluntary Surrender and Rendering Meritorious Service

Article 67

Voluntary Surrender refers to the case that anyone who voluntarily surrenders himself to a judicial organ after committing a crime,
and truthfully confesses his crime. A criminal who conducts voluntary surrender may be given a lighter or mitigated punishment. Those
whose crimes are relatively minor may be exempted from punishment.

If a suspected criminal or defendant under compulsory measure or criminal who serves a sentence truthfully confesses his other crimes
that is unknown to a judicial organ, he shall be dealt with as voluntary surrender.

Article 68

A criminal who is verified that he discloses another person’s crime, or provides key clues that lead to solve another case or renders
other meritorious service may be given a lighter or mitigated punishment. Those who renders great meritorious service may be given
a mitigated punishment or be exempted from punishment.

Those who not only conducts voluntary surrender but also renders great meritorious service shall be given a lighter punishment or
be exempted from punishment.

Section 4 Combined Punishment for Several Crimes

Article 69

For a criminal who commits several crimes before a judgment is pronounced, unless he is sentenced to death or life imprisonment, his
term of punishment shall be decided in such a way that it may not exceed the total of the terms for all the crimes and must be longer
than the maximum term for any one of the crimes, depending on the circumstances of each case. However, the term of public surveillance
may not exceed three years, the term of criminal detention may not exceed one year, and fixed-term imprisonment may not exceed twenty
years.

If among the crimes there are any for which a supplementary punishment is imposed, the supplementary punishment must still be executed.

Article 70

If after a judgment has been pronounced but before the punishment has been completely executed it is discovered that b

PROVISIONS FOR LABOR MANAGEMENT IN CHINESE-FOREIGN JOINT VENTURES

Provisions of the PRC for Labor Management in Chinese-Foreign Joint Ventures

    

(Promulgated by the State Council on and Effective as of July 26, 1980)

   Article 1. The labor management problems of Chinese-foreign joint ventures ( hereafter referred to as “joint ventures”) shall all be handled
in accordance with these Provisions, except for the those governed by the provisions of Article 6, Paragraph 2 of the Law of the
People’s Republic of China on Chinese-Foreign Joint Ventures.

   Article 2. The employment, dismissal and resignation of the staff and workers of joint ventures, and their production and work tasks, wages
and awards and punishments, work schedules and holidays and paid leaves of absence, labor insurance and welfare benefits, labor protection,
labor discipline and other matters shall be prescribed through the signing of labor contracts.

A labor contract shall be signed collectively by the joint venture and the venture’s union organization; a relatively small joint
venture may sign contracts with staff and workers on an individual basis.

After a labor contract is signed, it must be submitted to the labor management department of the people’s government of the relevant
province, autonomous region or municipality directly under the central authority for approval.

   Article 3. The staff and workers of a joint venture, whether recommended by the local department in charge of the venture or the local labor
management department, or recruited by the joint venture itself with consent of the labor management department, must all be tested
by the joint venture and selected for employment on the basis of their qualifications.

Joint ventures may establish skilled worker’s schools and training courses for the training of managerial personnel and skilled workers.

   Article 4. A joint venture may dismiss staff and workers who become superfluous as a result of changes in production and technical conditions
if, after training, they cannot meet its requirements and they are not suitable for transfer to other work; but the venture must
give them compensation in accordance with provisions of the labor contract.

The dismissed staff and workers shall be assigned other work by the department in charge of the venture or by the labor management
department.

   Article 5. A joint venture may, in accordance with the seriousness of the case, impose necessary sanctions against staff and workers who violate
the rules and regulations of the venture and thereby cause certain bad consequences. The sanction of discharge must be reported to
the department in charge of the venture and the labor management department for approval.

   Article 6. If the trade union considers the joint venture’s dismissal of or imposition of sanctions against staff and workers to be unreasonable,
it has the right to raise an objection and to send representatives to resolve the matter through consultation with the board of directors;
if the matter cannot be resolved through consultation, it shall be handled in accordance with the procedures set forth in Articles
14 of these Provisions.

   Article 7. When, because of special circumstances, staff and workers of a joint ventures, in accordance with the provisions of the labor contract,
submit their resignations to the venture through their trade union, the venture shall give its consent.

   Article 8. The wage levels of the staff and workers of joint ventures shall be fixed at 120 to 150 per cent of the real wages of the staff and
workers of state enterprises in the locality in the same line of business.

   Article 9. The system of wage standards, types of wages, bonuses, subsidies, etc. for staff and workers of a joint venture shall be discussed
and decided by the board of directors.

   Article 10 The bonus and welfare fund for staff and workers that is established by a joint venture from its profits must be used for bonuses
and the collective welfare of the staff and workers, and may not be misappropriated.

   Article 11. A joint venture must pay the labor insurance and medical expenses of the Chinese staff and workers, as well as the various government
subsidies for staff and workers, in accordance with the standards for state enterprises.

   Article 12. Matters such as the employment, dismissal, resignation, pay, welfare and social insurance of foreign staff and workers of a joint
venture shall be provided for in the employment contract.

   Article 13. Joint ventures must implement the rules and regulations of the Chinese Government concerning labor protection and ensure safety in
production and civilized production, and the labor management department of the Chinese Government has the right to carry out supervision
and inspection.

   Article 14. Labor disputes that occur in a joint venture shall first of all be resolved through consultation between the two disputing parties;
if consultation cannot resolve the matter, one or both parties to the dispute may request arbitration by the labor management department
of the people’s government of the province, autonomous region or municipality directly under the central authority where the joint
venture is located; if one party does not accept the arbitration award, it may file a suit in the people’s courts.

   Article 15. The right to interpret these Provisions resides in the State General Labor Bureau of the People’s Republic of China.

   Article 16. These Provisions shall go into effect on the day of their promulgation.

(The English translations are for reference only)

    





DETAILED RULES AND REGULATIONS FOR THE IMPLEMENTATION OF THE INCOME TAX LAW OF THE PEOPLE’S REPUBLIC OF CHINA CONCERNING JOINT VENTURES WITH CHINESE AND FOREIGN INVESTMENT

INCOME TAX LAW CONCERNING CHINESE-FOREIGN EQUITY JOINT VENTURES

Category  TAXATION Organ of Promulgation  The National People’s Congress Status of Effect  With An Amendment Existing
Date of Promulgation  1980-09-10 Effective Date  1980-09-10  


Income Tax Law of the People’s Republic of China Concerning Chinese-foreign Equity Joint Ventures



(Adopted at the Third Session of the Fifth National People’s Congress on

September 10, 1980 and promulgated for implementation by Order No.10 of the
Chairman of the Standing Committee of the National People’s Congress on
September 10, 1980) (Editor’s Note: For the revised text, see Decision of the
Standing Committee of the National People’s Congress Regarding Revision of
the Income Tax Law of the People’s Republic of China Concerning
Chinese-Foreign Equity Joint Ventures promulgated on September 2, 1983)

    Article 1  Income tax shall be paid in accordance with this Law by
Chinese-foreign equity joint ventures (hereinafter referred to as “joint
ventures”) within the territory of the People’s Republic of China on their
income from production, business operations and other sources.

    Income tax on the income derived from production, business operations
and other sources by branches and subbranches of a joint venture that are
within and outside the territory of China shall be paid by their head office
on a consolidated basis.

    Article 2  The taxable income of a joint venture shall be the amount
remaining from its gross income in a tax year after the costs, expenses and
losses have been deducted.

    Article 3  The income tax rate on joint ventures shall be 30%. In addition
, a local income tax of 10% Of the assessed income tax shall be levied.

    The income tax rates on joint ventures exploiting petroleum, natural gas
and other resources shall be stipulated separately.

    Article 4  In the case of a foreign joint venturer remitting out of China
its share of profit obtained from the venture, an income tax of 10% shall be
levied on the remitted amount.

    Article 5  A joint venture scheduled to operate for a period of 10 years
or more shall, upon approval the tax authorities of an application filed by
the venture, be exempted from income tax in the first two years after it has
begun to make a profit and allowed a 50% reduction in the third through the
fifth years.

    With the approval ol the Ministry of Finance of the People’s Republic of
China, joint ventures engaged in low-profit operations such as farming and
forestry or joint ventures established in remote, economically
under-developed areas may be allowed a 15-30% reduction in income tax for a
period of another ten years following the expiration of the term for exemption
and reductions prescribed in the preceding paragraph.

    Article 6  A joint venturer which reinvests in China its share of profit
obtained from the venture for a period of not less than five years shall,
upon approval by the tax authorities of an application filed by the joint
venturer, be refunded 40% of the income tax already paid on the reinvested
amount. If it withdraws the reinvested funds before the end of the fifth year,
it shall repay the refunded tax.

    Article 7  Losses incurred by a joint venture in a tax year max, be made
up with a corresponding amount drawn from next year’s income. Should the
income in the subsequent tax year be insufficient to make up for the said
losses, the balance may be made up with further deductions from its income
year by year, but within a period not exceeding five years.

    Article 8  Income tax on joint ventures shall be computed and levied in
an annual basis and paid advance in quarterly instalments. Such advance
payments shall be made within 15 days after the end of each quarter, and the
final settlement shall be made within five months after the end of each tax
year, with a refund for any overpayment or a supplemental payment for any
deficiency.

    Article 9  Joint ventures shall file their income tax returns in respect
of advance payments with the local tax authorities within the period
prescribed for advance payments, and shall file their annual income tax
returns together with the statements of final accounts within four months
after the end of the tax year.

    Article 10  Income tax on joint ventures shall be computed in terms of
Renminbi (RMB). Income in foreign currency shall be taxed on the equivalent
amount converted into Renminbi according to the exchange rate quoted by the
State General Administration of Exchange Control of the People’s Republic
of China.

    Article 11  When a joint venture starts operations, changes its line of
production, moves to a new site, ceases to operate or assigns its registered
capital, it shall present the relevant certificates for tax registration
with the local tax authorities within 30 days after registering with the
General Administration for Industry and Commerce of the People’s Republic
of China.

    Article 12  The tax authorities shall have the right to inspect the
financial, accounting and tax affairs of joint ventures. The joint ventures
must make reports according to the facts and provide all relevant
information; they may not refuse to cooperate and may not conceal the facts.

    Article 13  A joint venture must pay its tax within the prescribed time
limit. In case of failure to do so, the tax authorities, in addition to
setting a new time limit for tax payment, shall impose a surcharge for
overdue payment equal to 0.5% of the overdue tax for every day in arrears,
starting from the first day payment becomes overdue.

    Article 14  The tax authorities may, in light of the circumstances,
impose a fine on a joint venture which has violated the provisions of
Articles 9, 11 or 12 of this Law.

    In dealing with any joint venture which has evaded or refused to pay tax,
the tax authorities, in addition to pursuing the tax payment, impose a fine
of not more than five times the amount of the tax underpaid or not paid, in
accordance with the seriousness of the case. Cases of gross violation shall be
handled by the local people’s courts in accordance with the law.

    Article 15  In case of a dispute with the tax authorities over tax
payment, a joint venture must pay tax according to the relevant regulations
before applying to higher tax authorities for reconsideration. If it does not
accept the decision made after such reconsideration, it may bring suit in the
local people’s court.

    Article 16  Income tax paid abroad by a joint venture or its branches or
subbranches may be credited against the assessed income tax of the head office.

    When agreements on avoidance of double taxation have been concluded
between the Government of the People’s Republic of China and foreign
governments, income tax credits shall be handled in accordance with the
provisions of the respective agreements.

    Article 17  Rules for the implementation of this Law shall be formulated
by the Ministry of Finance of the People’s Republic of China.

    Article 18  This Law shall go into effect on the day of its promulgation.





PROVISIONS ON LABOUR MANAGEMENT IN CHINESE-FOREIGN EQUITY JOINT VENTURES OF THE PEOPLE’S REPUBLIC OF CHINA

20011006

The State Council

Provisions on Labour Management in Chinese-foreign Equity Joint Ventures of the People’s Republic of China

the State Council

July 26, 1980

Article 1

Labour management problems concerning Chinese-foreign equity joint ventures (hereinafter referred to as “joint ventures”) shall all
be handled in accordance with these Provisions, in addition to the pertinent stipulations in Article 6 of the Law of the People’s
Republic of China on Chinese-Foreign Equity Joint Ventures.

Article 2

Matters pertaining to employment, dismissal and resignation of the workers and staff members, tasks of production and other work,
wages and awards and punishment, working time and vacation, labour insurance and welfare, labour protection and labour discipline
in joint ventures shall be stipulated in the labour contracts signed.

A labour contract is to be signed by a joint venture and the trade union organization in the joint venture collectively. A relatively
small joint venture may sign contracts with the workers and staff members individually.

A signed labour contract must be submitted to the labour management department of the government of the province, autonomous region
or municipality directly under the Central Government for approval.

Article 3

The workers and staff members of a joint venture either recommended by the authorities in the locality in charge of the joint venture
or the labour management department, or recruited by the joint venture itself with the consent of the labour management department,
shall all be selected by the joint venture through rigorous examinations.

Joint ventures may run workers’ schools and training courses to train managerial personnel and skilled workers.

Article 4

With regard to the workers and staff members who become redundant as a result of changes in production and technical conditions of
the joint venture, those who fail to meet the requirements after training and are not suitable for other jobs in the joint venture
can be discharged. However, this must be done in accordance with the stipulations in the labour contract and the enterprise must
give compensation to these workers.

The dismissed workers and staff members will be assigned to other jobs by the authorities in charge of the joint venture or the labour
management department.

Article 5

The joint venture may, according to the degree of seriousness of the case, take action against those workers or staff members whose
violation of the rules and regulations of the enterprise has resulted in certain bad consequences. Punishment by discharge must be
reported to the authorities in charge of the joint venture and the labour management department for approval.

Article 6

With regard to the dismissal and punishment of workers and staff members by the joint venture, the trade union has the right to raise
objections if it considers them unreasonable, and send representatives to seek a solution through consultation with the board of
directors. Should the consultation fail to arrive at a solution, the matter shall be handled in accordance with the procedures set
forth in Article 14 of these Provisions.

Article 7

When workers and staff members of a joint venture, on account of special circumstances, submit their resignation to the enterprise
through the trade union in accordance with the labour contract, the enterprise shall give its consent.

Article 8

The pay levels of workers and staff members in a joint venture shall be determined at 120-150% of the real wages of workers and staff
members of state-owned enterprises of the same trade in the locality.

Article 9

The wage standards, the forms of payment, and bonus and subsidy systems are to be discussed and decided by the board of directors.

Article 10

The rewards and welfare funds drawn by the joint venture from the profits must be used as rewards and collective welfare and shall
not be diverted to other uses.

Article 11

A joint venture must pay for the Chinese workers’ and staff members’ labour insurance, cover their medical expenses and various kinds
of government subsidies in the line with the standards obtaining in state-owned enterprises.

Article 12

The employment of foreign workers and staff members and their dismissal, resignation, pay, welfare and social insurance and other
relevant matters shall all be specified in the employment contracts.

Article 13

Joint ventures must implement the relevant rules and regulations of the Chinese Government on labour protection and ensure safety
in production and civilized production. The labour management department of the Chinese Government has the right to supervise and
inspect their implementation.

Article 14

Labour disputes occurring in a joint venture shall first of all be solved through consultation by the two parties. If consultation
fails to arrive at a solution, either party or both parties may request arbitration by the labour management department of the people’s
government of the province, autonomous region or municipality directly under the Central Government where the joint venture is located.
Either party that disagrees to the arbitration award may file a suit at a people’s court.

Article 15

The power of interpretation of these Provisions resides in the State Bureau of Labour of the People’s Republic of China.

Article 16

These Provisions shall enter into force as of the date of promulgation.



 
The State Council
1980-07-26

 






RULES FOR THE IMPLEMENTATION OF THE INCOME TAX LAW OF THE PEOPLE’S REPUBLIC OF CHINA ON CHINESE-FOREIGN EQUITY JOINT VENTURES

19801210The State Council19910701

The Ministry of Finance

Rules for the Implementation of the Income Tax Law of the People’s Republic of China on Chinese-foreign Equity Joint Ventures

The Ministry of Finance

December 14, 1980

(Approved by the State Council on December 10, 1980 , Promulgated by the Ministry of Finance on December 14, 1980)

Article 1

These Rules are formulated in accordance with the provisions of Article 17 of the Income Tax Law of the People’s Republic of China
for Chinese-foreign Equity Joint Ventures (hereinafter referred to as the “Tax Law”).

Article 2

“Income derived from production and business operations” mentioned in Article 1 of the Tax Law means income derived from production
and business operations in the fields of industry, mining, communications, transportation, agriculture, forestry, animal husbandry,
fisheries, poultry farming, commerce, tourism, catering, service trades and other fields of production and business operations.

“Other income” mentioned in Article 1 of the Tax Law means: income from dividends, bonuses, interest and income from the leasing
or transfer of property, patent rights, proprietary technology, trade mark rights, copyrights and other such property.

Article 3

“The local income tax of 10% of the assessed income tax” mentioned in Article 3 of the Tax Law means the local income tax computed
and imposed on the basis of the actual amount of the income tax paid by a joint venture.

A reduction or exemption from the local income tax because of special reasons shall be decided by the people’s governments of the
respective provinces, autonomous regions or municipalities directly under the Central Government in which the joint venture is located.

Article 4

A foreign partner in a joint venture which remits its share of profits obtained from the joint venture shall file a return with the
local tax authorities and the remitting agency shall withhold income tax of equal 10% of the amount remitted. Amounts not remitted
shall not be subject to tax.

Article 5

“The first profit-making year” mentioned in Article 5 of the Tax Law means the year in which a joint venture begins to realize profits
after the losses, if any, of the initial stage of its operation have been set off in accordance with the provisions of the Tax Law.

Article 6

A foreign partner in a joint venture which reinvests its share of profit obtained from the venture in the same venture or in other
Chinese-foreign equity joint ventures for a period of not less than 5 consecutive years may, on the basis of the certificate of enterprise
receiving such reinvestment, and upon examination, verification by and approval of the tax authorities to which payment of tax was
made, receive refund of 40% of the income tax already paid on the amount reinvested.

Article 7

The tax year of a joint venture refers to each year of the Gregorian calendar commencing January 1 and ending December 31.

Article 8

The taxable income shall be calculated according to the following formulas:

1.

Industry:

a.

manufacturing cost for the period = direct materials consumed in production for the period + direct labor + manufacturing expenses;

b.

cost of the products manufactured for the period = inventory of semi-finished products and products in process at the beginning of
the period + manufacturing cost of the period – inventory of semi-finished products and products in process at the end of the period;

c.

cost of products sold = cost of the products manufactured for the period + inventory the products at the beginning of the period –
inventory of the products at the end of the period;

d.

not sales = gross sales – (sales returns + sales discounts and allowances);

e.

profit on sales = net sales – cost of products sold – tax on sales – cost of sales – (selling expenses + overhead expenses);

f.

taxable income = profit on sales + profit from other operations + non-operating income – non-operating expenses.

2.

Commerce:

a.

net sales = gross sales – (sales returns + sales discounts and allowances);

b.

cost of sales = inventory of merchandise at the beginning of the period + [purchases of merchandise during the period – (purchase
returns + purchase discounts and allowances) + purchase expenses] -inventory of merchandise at the end of the period;

c.

profit on sales = net sales – tax on sales – cost of sales – (selling expenses + overhead expenses);

d.

taxable income = profit on sales + profit from other operations + non-operating income – non-business operating expenses.

3.

Service trades:

a.

net business income = gross business income – (tax on business income + operating expenses + overhead expenses);

b.

taxable income = net business income + non-operating income – non-operating expenses.

4.

Other lines of business: calculation shall be made with reference to the above formulae.

Article 9

The following items shall not be itemized as costs, expenses or losses in the calculation of the taxable income:

1.

expenditures related to the acquisition or construction of machinery, equipment, buildings, facilities and other fixed assets;

2.

expenditures related to the acquisition of intangible assets;

3.

interest on equity capital;

4.

income tax payments and local surtax payments;

5.

fines for illegal business operations and losses caused by the confiscation of property;

6.

penalties for the overdue payment of taxes and tax fines;

7.

the portion of losses caused by windstorms, floods, fires and other such disasters, which is compensated by insurance proceeds;

8.

donations other than those for public welfare and relief purposes; and

9.

the portion of the business expenses incurred within the tax year in excess of either 3 thousandths of gross sales of 10 thousandths
of gross business income and entertainment expenses not relevant to production and business operations.

Article 10

The depreciation on fixed assets used by a joint venture shall be calculated on an annual basis. “Fixed assets of a joint venture”
means buildings, machinery, mechanical apparatuses, means of transport and other such production equipment having a useful life of
1 year or more. However, articles having a unit value of 500 yuan or less and a shorter useful life may be itemized as expenses on
the basis of actual consumption.

Article 11

The valuation of fixed assets shall be based on the original value.

For fixed assets regarded as investments, the original value shall be the price agreed upon by the parties at the time of investment.

For fixed assets that have been purchased, the original value shall be the purchase price plus transport expenses, installation expenses
and related expenses incurred prior to the use of the assets.

For fixed assets that have been manufactured or constructed by the venture, the original value shall be the actual expenses incurred
for manufacture or construction.

Article 12

In calculating depreciation of fixed assets, the salvage value shall be estimated and deducted from the original value; in principle,
the salvage value should be 10% of the original value. In the case of fixed assets for which it is necessary to retain a lower or
no salvage value, the matter shall be reported to the local tax authorities for approval.

Depreciation of fixed assets shall generally be calculated using the straight-line method of depreciation.

Article 13

In the calculation of depreciation, useful life of the various categories of fixed assets shall be as follows:

1.

for houses and buildings, the minimum useful life shall be 20 years;

2.

for railway rolling stock, boats and machinery and other production equipment the minimum useful life shall be 10 years; and

3.

for electronic equipment and means of transport other than railway rolling stock and boats and ships, the minimum useful life shall
be 5 years.

Where, for special reasons, a joint venture needs to accelerate depreciation or change the method of depreciation, an application
may be submitted to the local tax authorities for examination and then transmitted level by level to the Ministry of Finance of the
People’s Republic of China for approval.

Article 14

Expenses incurred on technical innovation which result in an increase in the value fixed assets in use shall not be itemized as expenses.

No further depreciation shall be allowed for fixed assets which remain in use after having been fully depreciated.

Article 15

The balance of the proceeds realized by a joint venture from the disposal of fixed assets at current prices shall, after deduction
of the undepreciated amount or the salvage value, be entered into the profit and loss account for the current year.

Article 16

Intangible assets such as proprietary technology, patent rights, trade mark rights, copyrights, rights to the use of sites and other
special rights regarded as investments, shall be amortized starting with the first year of use on the basis of the amount specified
in the agreements or contracts; intangible assets acquired at a fixed price shall be amortized starting with the first year of use
on the basis of actual cost.

The above-mentioned intangible assets which have a specified period of use shall be amortized according to the specified period; intangible
assets without a specified period of use may be amortized over a 10 year period.

Article 17

Expenses incurred during the period of organization of a joint venture shall be amortized after the commencement of production or
operation; the amount amortized each year shall not exceed 20% of such expenses.

Article 18

Inventory of merchandise, raw materials, products in process of production, semi-finished products, finished products and by-products
shall be valued at cost. The joint ventures may choose one of the following methods of calculation: first-in first-out; moving average;
or weighted average. Where a change in the method of calculation is necessary, the matter shall be reported to the local tax authorities
for approval.

Article 19

Income tax to be paid in quarterly installments as stipulated in Article 8 of the Tax Low may be calculated on the basis of one-fourth
of either the planned annual profit for the current year or the actual income of the preceding year.

Article 20

Joint ventures, whether realizing profits or losses in a tax year, shall file their income tax returns and final accounting statements
with the local tax authorities within the prescribed period and shall include the audit statement of a certified public accountant
registered in the People’s Republic of China.

The accounting statements submitted by the domestic branches of a joint venture their head offices shall be filed at the same time
with the local tax authorities for the record.

Article 21

Joint ventures shall file tax returns within the time limit set by the Tax Law. In case of failure to submit the tax returns within
the prescribed time limit owing to special reasons, application shall be submitted to the local tax authorities within the said time
limit, and the time limit may be appropriately extended upon the latter’s approval.

The final day of the time limit for tax payment and that for filing tax returns may be postponed to the next business day if it falls
on a public holiday.

Article 22

Income earned by a joint venture in foreign currencies shall be taxed on the equivalent amount converted into Renminbi according to
the foreign exchange rate quoted by the State General Administration of Exchange Control on the day the receipt for payment of tax
is issued.

Article 23

In principle, joint ventures shall use the accrual method of accounting to calculate income and expenditure. All accounting records
shall be accurate and complete and shall be supported by valid vouchers as the basis for entries.

Article 24

The financial and accounting procedures of a joint venture shall be submitted to the local tax authorities for the record.

Where the financial and procedures of a joint venture are inconsistent with the provisions of the Tax Law, the tax liability shall
be determined according to the provisions of the Tax Law.

Article 25

The accounting vouchers, books, statements and reports adopted by joint ventures shall be kept in the Chinese language, or in both
Chinese and a foreign language.

Accounting vouchers, books, statements and reports shall be retained for at least 15 years.

Article 26

Forms of sales invoices and business receipts used by a joint venture shall be submitted to the local tax authorities for approval
prior to use.

Article 27

Officials assigned by the tax authorities to conduct investigation of the financial, accounting and tax affairs of a joint venture,
shall produce identification cards and undertake to maintain confidentiality.

Article 28

The tax authorities may, according to the seriousness of the case, impose a fine of 5,000 yuan or less on a joint venture which violates
the provisions of Article 9 , 11 or 12 of the Tax Law.

Article 29

The tax authorities may impose a fine of 5,000 yuan or less on a joint venture which has violated the provisions of paragraph 2 of
Article 25 , or Article 26 of these Rules.

Article 30

Notice of disposal of a violation shall be served in the cases in which the tax authorities impose a fine in accordance with provisions
of the Tax Law and these Rules.

Article 31

When a joint venture applies for reconsideration of a case in accordance with the provisions of Article 15 of the Tax Law, the tax
authorities concerned shall decide upon the disposition of the case within 3 months after receipt of the application.

Article 32

Income tax paid to foreign authorities by a joint venture or its branches on their income received outside China may be credited against
the amount of income tax to be paid by their head office upon presenting the foreign tax payment certificate. But the credit amount
shall not exceed the tax payable on the income received abroad computed according to the tax rate prescribed by China’s Tax Law.

Article 33

Standardized income tax returns and tax payment receipt to be used by joint ventures shall be printed by the General Taxation Bureau
of the Ministry of Finance of the People’s Republic of China.

Article 34

The right to interpret these Rules shall reside with the Ministry of Finance of the People’s Republic of China.

Article 35

These Rules shall enter into force on the same date of promulgation and effective date of the Income Tax Law of the People’s Republic
of China for Chinese-foreign Equity Joint Ventures.



 
The Ministry of Finance
1980-12-14

 






INCOME TAX LAW OF THE PEOPLE’S REPUBLIC OF CHINA CONCERNING JOINT VENTURES USING CHINESE AND FOREIGN INVESTMENT

REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON LABOUR MANAGEMENT IN JOINT VENTURES USING CHINESE AND FOREIGN INVESTMENT

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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