1997

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE ISSUES OF FOREIGN-RELATED TAXATION OCCURRED WHILE CARRYING OUT THE PROVISIONS ON TAXATION POLICY OF STATE HIGH/NEW TECHNOLOGY INDUSTRY DEVELOPMENT ZONES

The State Administration of Taxation

Circular of the State Administration of Taxation on the Issues of Foreign-related Taxation Occurred While Carrying Out the Provisions
on Taxation Policy of State High/New Technology Industry Development Zones

GuoShuiHanFa [1991] No.663

September 16, 1991

The issues of foreign-related taxation occurred while carrying out the Circular of State Council Concerning Approving the State High/New
Technology Industry Development Zones and Relevant Policies and Provisions (GuoFa [1991] No.12) and the Provisions on Tax Policy
of State High/New Technology Industry Development Zones (hereinafter referred to as the Provisions) are specified as follows:

1.

Where the Chinese-foreign equity joint ventures which are in the high/new technology industry development zones (hereafter as development
zones) approved by State Council to be established and which are determined to be high/new technology enterprises, according to the
Paragraph 4 of Article 6 of the Provisions, have difficulty paying taxes after the period of tax exemption is expired and need be
given special favor of proper reduction and exemption of tax again in a certain period, the enterprise shall file the application
and submit the report to State Administration of Taxation for approval after the local tax authorities have examined.

2.

The enterprises with foreign investment which are established in development zones and determined to be high/new technology enterprises,
the business income tax may be levied at the reduced rate of 15% since the tax year on which the date of the determination to be
high/new technology enterprises falls.

3.

Where the high/new technology industry development zones defined by State Council is in coastal economical open zone, the enterprises
with foreign investment which are determined to be high/new technology enterprises are permitted to choose one preferential treatment
of taxation in the provisions of taxation preference in economical open zones and industry development zones, but shall not overlap.

4.

Where the enterprises with foreign investment which are established in development zones and determined to be high/new technology
enterprises need accelerate the depreciation of the apparatus and facilities used for development of high/new technology or production
of high/new technology products, shall file an application, and after the check and approval of local taxation authorities, be reported,
level by level, to the State Administration of Taxation for approval.



 
The State Administration of Taxation
1991-09-16

 







REGULATIONS FOR THE IMPLEMENTATION OF THE LAND ADMINISTRATION LAW ()

Category  LAND ADMINISTRATION Organ of Promulgation  The State Council Status of Effect  Invalidated
Date of Promulgation  1991-01-04 Effective Date  1991-02-01 Date of Invalidation  1999-01-01


Regulations for the Implementation of the Land Administration Law of the People’s Republic of China (1991)

Chapter I  General Provisions
Chapter II  Land Ownership Rights and Land Use Rights
Chapter III  Utilization and Protection of Land
Chapter IV  Land for State Construction
Chapter V  Land for Township(Town) and Village Construction
Chapter VI  Legal Liability
Chapter VII  Supplementary Provisions

(Promulgated by Decree No.73 of the State Council of the People’s

Republic of China on January 4, 1991, effective on February 1, 1991)
(Editor’s Note: This Regulations has been annulled by REGULATIONS FOR THE
MPLEMENTATION OF THE LAND ADMINISTRATION LAW OF THE PEOPLE’S REPUBLIC OF
CHINA promulgated on December 27, 1998, and effective as of January 1, 1999)
Chapter I  General Provisions

    Article 1  These Regulations are formulated according to the provisions
of Article 56 of the Land Administration Law of the People’s Republic of
China (hereinafter referred to as the Land Administration Law).

    Article 2  The State Land Administration shall be responsible for the
uniform administration of land throughout China.
Chapter II  Land Ownership Rights and Land Use Rights

    Article 3  The whole people, that is the state, shall hold post_title to the
following types of land:

    (1) land in urban areas;

    (2) land in rural and suburban areas which has been legally expropriated,
occupied, requisitioned, requisitioned by purchase or returned to the state
(except land legally designated or confirmed as collectively owned land); and

    (3) forest areas, grassland, mountain ridges, wasteland, beaches, river
banks and other land not confirmed by the state as being collectively owned.

    Article 4  A party with post_title to collectively owned land or a party using
state-owned land must submit a land registration application to the land
administration department of its local people’s government at county level or
above.

    Registration of collectively owned land shall be carried out by the local
people’s governments at county level. After verification, a certificate of
post_title to collectively owned land shall be issued confirming right of
ownership.

    Registration of state-owned land used by a unit or individual shall be
carried out by the local people’s governments at county level or above. After
verification, a land use certificate for state-owned land shall be issued
confirming right of usage.

    The format of land certificates shall be uniformly formulated by the
State Land Administration.

    Confirmation of ownership of or the right to use forest or grassland
areas or the right to use waters and their banks or beaches for aquatic
breeding purposes shall be handled in accordance with the relevant provisions
of the Forest Law, Grasslands Law and Fisheries Law respectively.

    Article 5  Local people’s governments at county level or above shall
register state-owned land which has yet to be developed or used and shall be
responsible for its protection and management.

    Article 6  If an amendment is legally made to land ownership or land use
rights or if land use rights are assigned as the result of the legal purchase
and sale or assignment of buildings, attachments, etc., on the land, an
application to register an amendment of the land ownership or land use rights
must be submitted to the land administration department of the local people’s
government at county level or above and the local people’s government at
county level or above shall replace the land certificate.

    When buildings or attachments on land are legally purchased, sold or
assigned, procedures to register transfer of ownership shall be carried out
pursuant to relevant state regulations.

    Article 7  If a land user’s rights are withdrawn in accordance with the
provisions of Article 19 of the Land Administration Law, the land
administration department shall report the matter to the people’s government
at county level or above for approval to cancel the land user’s land use
certificate for state-owned land. The land administration department shall
also carry out procedures for canceling land registration.

    Article 8  Disputes between units owned by the whole people, between units
with collective ownership or between units owned by the whole people and those
with collective ownership, over the ownership of or the right to use land
shall be settled by the people’s government at county level or above in the
locality of the land.

    Disputes between individuals or between individuals and units owned by the
whole people or units with collective ownership, over the right to use land
shall be settled by the people’s government at township or county level in the
locality of the land.

    If a dispute over land ownership or land use rights necessitates the
reconfirmation of land ownership or land use rights, the local people’s
government at county level or above shall confirm the ownership or usage
rights and issue a land certificate.
Chapter III  Utilization and Protection of Land

    Article 9  The state shall establish a land survey system, the content of
which shall include surveying the possession of land rights, land use
circumstances and land conditions.

    The State Land Administration, in conjunction with other relevant
authorities, shall formulate a national land survey plan for implementation
subject to approval of the State Council.

    Land administration departments of local people’s governments at county
level and above shall, in conjunction with other relevant authorities,
formulate their local land survey plans. These plans shall be implemented
after submitted to and approved by the people’s governments at the same level
and reported for the record to the land administration departments of
people’s governments at the next higher level.

    Land administration departments of local people’s governments at county
level and above shall organize relevant authorities to carry out land surveys.
Landowners and land users shall co-operate with such surveys and provide
necessary information.

    Article 10  Land administration departments of local people’s governments
at county level and above shall, in conjunction with relevant authorities,
evaluate the grading of land pursuant to land survey results.

    Article 11  The state shall establish a land statistics system. Land
administration departments of local people’s governments at county level and
above shall, in conjunction with statistics authorities, undertake land
statistics work pursuant to the law. Statistics personnel shall exercise their
authority to gather land-related statistics in accordance with the law.
Landowners and land users shall provide statistical information and shall be
prohibited from making false reports, concealing the truth, refusing to
provide or delaying the provision of information or falsifying or distorting
information.

    Article 12  The State Land Administration, in conjunction with relevant
authorities, shall draft national overall land utilization plans which, after
comprehensive balancing by the State Planning Commission, shall be implemented
subject to approval by the State Council.

    Land administration departments of local people’s governments at county
level and above shall, in conjunction with relevant authorities, draft overall
land utilization plans for their respective levels which, after comprehensive
balancing by planning authorities at the same level, shall be submitted to
the people’s governments at the same level for examination and approval. Such
plans shall be implemented subject to further approval by people’s governments
at the next higher level.

    People’s governments at township level shall draft their overall land
utilization plans which shall be implemented subject to approval by the county
level people’s governments.

    Any amendments to approved overall land utilization plans must be
submitted to the original approving organ for approval.

    Article 13  For developing state-owned barren hills, wasteland, river
banks or beaches, an application must be submitted to the local land
administration department. Approval shall be granted by the local people’s
government at county level or above pursuant to the approval jurisdiction
stipulated by the province, autonomous region or municipality directly under
the central government. Should the law or regulations stipulate otherwise,
matters shall be handled pursuant to the provisions of the law or regulations.
If developing between 10,000 and 20,000 mu of land at one time, approval must
be obtained from the State Land Administration. If developing more than 20,000
mu of land at one time, approval must be obtained from the State Council.

    Article 14  A unit or individual proposing to change cultivated land into
non-cultivated land must obtain approval from the local people’s government
at county level or above.

    Article 15  Land which a unit or individual has contracted to operate and
private plots or hills legally confirmed as being for private use by an
individual must be used pursuant to the stipulated usage. The unauthorized
construction of buildings, kilns or tombs, mining, quarrying or the excavation
of sand or earth shall be prohibited.

    A unit or individual proposing to engage in business activities such as
mining, quarrying or the excavation of sand or earth on the land as referred
to in the preceding paragraph must submit an application to the land
administration department of the local people’s government at county level or
above and obtain approval from the people’s government at county level or
above. Should the law or regulations stipulate otherwise, matters shall be
handled pursuant to the provisions of the law or regulations.

    Article 16  A unit or individual using land capable of reclamation
following mining or the excavation of sand or earth shall be responsible for
its reclamation pursuant to the provisions of the Land Reclamation Regulations
promulgated by the State Council. Land administration departments of people’s
governments at county level or above shall, in conjunction with relevant
authorities, inspect the reclamation work before issuing approval.
Chapter IV  Land for State Construction

    Article 17  Land used by the state for economic and cultural development,
national defense construction and public welfare undertakings shall be used
economically and rationally. When submitting a construction project design
assignment for approval, the opinion of the local land administration
department must be attached.

    Article 18  Examination and approval procedures for the use of land in
state construction:

    (1) A construction unit proposing to use land for construction purposes
shall apply to the land administration department of the local people’s
government at county level or above in the locality of the land it wants to
expropriate by presenting an approved design assignment or other relevant
documents such as preliminary designs or annual capital construction plans.

    (2) The land administration department of the local people’s government
at county level or above shall examine the application to use land for
construction purposes and determine the boundaries of the area of land to be
used, as well as arrange for the construction unit, the unit which originally
held the rights to the land and other relevant units to discuss matters of
compensation and resettlement in relation to the expropriated land and report
these details to the people’s government at county level or above for
approval.

    (3) After the application to use land for construction purposes is
approved by the relevant people’s government at county level or above pursuant
to the statutory approval jurisdiction, the people’s government at county
level or above in the locality of the expropriated land shall issue a document
of approval to use the land for construction purposes and the land
administration department shall transfer the land use rights in full or in
stages, depending on the construction schedule.

    (4) After completion of construction, when the department in charge of the
construction project arranges for the relevant authorities to examine
construction prior to acceptance of the project, the land administration
department of the people’s government at county level or above shall inspect
and verify the actual use of the land (after completion of a construction
project in an urban planning district, the administrative authority in charge
of urban planning shall, in conjunction with the land administration
department, inspect and verify the actual use of the land) and, subject to
confirmation, land registration procedures shall be carried out pursuant to
the relevant provisions of Chapter II of these Regulations and a land use
certificate for state-owned land shall be issued.

    If applying to use land within an urban planning district for construction
purposes, the construction unit or individual shall handle matters pursuant to
the procedures stipulated above after obtaining a planning permit to use land
for construction purposes.

    Article 19  When land is to be used for construction projects such as
railways, highways or oil or water supply pipelines, an application for
approval, depending on the construction project’s overall plans, shall be
submitted in one lump, but procedures for expropriating and transferring land
may be done in stages. In the case of a construction project which is to
proceed in stages, applications for approval and procedures for expropriating
and transferring land may be done in stages in accordance with the work
schedule determined in the design assignment.

    Article 20  If emergency or disaster relief measures necessitate the
urgent use of land, the land may be used first, but, after the incident,
supplementary procedures for the temporary use of land or procedures for the
expropriation and transfer of land must be carried out pursuant to
regulations.

    Article 21  “Other land with an area of more than 2,000 mu” as mentioned
in paragraph 1 of Article 25 of the Land Administration Law shall include
construction projects which simultaneously require the expropriation of less
than 1,000 mu of cultivated land, together with other land in excess of 1,000
mu, amounting to a total land area of more than 2,000 mu.

    “Other land with an area of less than ten mu” as mentioned in paragraph 2
of Article 25 of the Land Administration Law shall include construction
projects which simultaneously require the expropriation of less than 3 mu of
cultivated land, together with other land of less than 10 mu, amounting to a
total land area of more than 3 mu and less than 10 mu.

    Article 22  If a land user’s right to use state-owned land is withdrawn in
accordance with the provisions of Article 19 of the Land Administration Law,
the local people’s government at county level or above may decide to issue the
land to an agricultural collective economic entity to cultivate. During the
cultivation period, the agricultural collective economic entity shall be
prohibited from building any permanent structures or planting perennial crops
on the land and shall be required to return the land on schedule pursuant to
state construction requirements. If there are young crops on the land at the
time of its return, the relevant construction unit shall pay compensation.

    Article 23  If construction requirements make it necessary for a
construction unit to temporarily expropriate additional land outside its
approved land use limits, an application for temporary use of land shall be
submitted to the land administration department of the local people’s
government at county level and the details reported to the people’s government
at the same level for approval. If temporary use of additional land is
required within an urban planning district, a set area application shall be
submitted first to the administrative authority in charge of urban planning
and, subject to examination and approval, an application for temporary use of
land shall be submitted to the land administration department.

    If collectively owned land is required for temporary use, compensation
shall be paid in accordance with the provisions of paragraph 1 of Article 33
of the Land Administration Law.
Chapter V  Land for Township(Town) and Village Construction

    Article 24  There shall be strict control over the use of agricultural
land for township(town) and village construction. The overfilling of control
quotas for the use of land in township(town) and village construction issued
by local people’s governments at county level or above shall be prohibited.

    Article 25  When land is required for rural residential buildings, a land
use application shall be submitted first to the village agricultural
collective economic entity or villagers’ committee and, subject to it being
discussed and approved by the villagers’ representative meeting or general
meeting, the application shall be submitted to the people’s government for
approval. The use of cultivated land shall be subject to approval by the
county level people’s government, following its examination and approval by
the township level people’s government and land administration department of
the county level people’s government. The use of existing residential
building sites, empty space within villages and other land shall be subject
to approval by the township level people’s government.

    Article 26  If use of collectively owned land is required for constructing
residential buildings for city or town residents with non-agricultural
resident registration, a land use application shall, after its approval by the
applicant’s working unit or residents’ committee, be submitted to the village
agricultural collective economic entity, villagers’ committee or township
(town) peasant collective economic entity in the locality of the land. If the
land required for use belongs to a village peasant collective, subject to the
land use application being discussed and approved by the villagers’
representative meeting or general meeting and its examination and approval by
the township(town) people’s government, it shall be submitted to the county
level people’s government for approval. If the land required for use belongs
to a township(town) peasant collective, subject to the land use application
being discussed and approved by the township(town) peasant collective economic
entity and its examination and approval by the township(town) people’s
government, it shall be submitted to the county level people’s government for
approval.

    Article 27  When workers, ex-servicemen or retired cadres returning to
their original villages or overseas Chinese, Hong Kong, Macao or Taiwan
compatriots returning to settle in their family villages require the use of
collectively owned land to construct residential building, matters shall be
handled pursuant to the provisions of Article 38 of the Land Administration
Law and Article 25 of these Regulations.

    Article 28  If land is required to construct a rural market in accordance
with township(town) or village construction plans, matters shall be handled
pursuant to the provisions of Article 40 of the Land Administration Law.

    Article 29  Non-agricultural production and operation activities by
leaseholding farm households and rural individual business shall use their
original residential sites. If there is a genuine need for the additional use
of collectively owned land, approval documents from the relevant authorities
shall be submitted, together with a land use application, to the village
peasant collective economic entity, villagers’ committee or township(town)
peasant collective economic entity in the locality of the land and, subject
to the application being discussed and approved by the villagers’
representative meeting or the township(town) peasant collective economic
entity, and its examination and approval by the township(town) people’s
government, it shall be submitted to the local people’s government at county
level or above for approval, pursuant to the approval jurisdiction stipulated
by the relevant province, autonomous region or municipality directly under the
central government.
Chapter VI  Legal Liability

    Article 30  Pursuant to the provisions of Articles 43 and 44 of the Land
Administration Law, in addition to ordering a violator to return illegally
occupied land and stipulating a limited period within which structures and
other installations newly erected on the land are to be demolished or
confiscated, a fine shall(may) also be imposed. The standards for such a fine
shall be up to 15 yuan for each square meter of illegally occupied land.

    Article 31  Pursuant to the provisions of Article 47 of the Land
Administration Law, in addition to confiscating illegal proceeds from a
violator and stipulating a limited period within which structures and other
installations newly erected on land purchased, sold or assigned by illegal
means are to be demolished or confiscated, a fine may also be imposed. The
standards for such a fine shall be up to 50% of the illegal proceeds
involved.

    Article 32  Pursuant to the provisions of Article 49 of the Land
Administration Law, in addition to ordering a violator to return funds
illegally seized, a fine may also be imposed. The standards for such a fine
shall be up to 30% of the funds illegally seized.

    Article 33  Pursuant to the provisions of Article 50 of the Land
Administration Law, in addition to ordering a violator to return the land, a
fine shall also be imposed. The standards for such a fine shall be up to 5
yuan for each square meter of illegally used land.

    Article 34  Pursuant to the provisions of Article 51 of the Land
Administration Law, if serious damage is caused to the cultivation conditions
of soil, in addition to ordering a violator to rectify the situation within
a limited period, a fine may also be imposed. The standards for such a fine
shall be determined in accordance with the provisions of legislation on the
protection of cultivated land. If soil desertification or salinization is
caused as the result of land development, in addition to ordering a violator
to rectify the situation within a limited period, a fine may also be imposed.
The standards for such a fine shall be determined in accordance with
standards stipulated by the people’s government of the relevant province,
autonomous region or municipality directly under the central government. If
soil erosion is caused as the result of land development, in addition to
ordering a violator to rectify the situation within a limited period, a fine
may also be imposed. The standards for such a fine shall be determined in
accordance with the provisions of legislation on water and soil conservation.

    Article 35  Fines must be paid within the stipulated period. In the event
of failure to pay on schedule, a late payment fine of 0.3% of the fine shall
be collected for each day in arrears.

    Penalty fines and late payment fines shall be handed over to the state
treasury in accordance with relevant state regulations.

    Article 36  If land is occupied illegally without approval or by gaining
approval fraudulently through such means as leaving arable land lie fallow,
in order to construct residential buildings or to undertake other
construction projects, a limited period shall be stipulated within which
buildings and other facilities newly erected on the illegally occupied land
must be demolished or confiscated and the return of the illegally occupied
land shall be ordered.

    If a unit or individual ordered to demolish newly erected buildings and
other facilities within limited period pursuant to the law, continues
construction, the penalty issuing authority shall have the right to seal up
and confiscate equipment and building materials which continue to be used.

    Article 37  In the event of false reporting, concealing the truth in a
report, refusing to submit a report or repeatedly delaying submission of a
report, as well as falsifying or distorting statistical information in
relation to land, penalty shall be imposed in accordance with the provisions
of Article 25 of the Statistics Law of the People’s Republic of China and
Article 31 of the Rules for Implementation of the Statistics Law of the
People’s Republic of China.

    Article 38  If a land ownership or land use right infringing party fails
to initiate legal proceedings or to fulfill the penalty decision within the
stipulated period after a penalty decision made by the land administration
department of the local people’s government at county level or above pursuant
to the provisions of Article 53 of the Land Administration Law, the infringed
party may apply to the people’s court for enforcement.
Chapter VII  Supplementary Provisions

    Article 39  The State Land Administration shall be responsible for
interpreting these Regulations.

    Article 40  These Regulations shall enter into force on February 1, 1991.






CUSTOMS REGULATIONS OF PRC CONCERNING THE CONTROL OVER PASSING TRAVELLERS’ LUGGAGE AND ARTICLES

Customs Regulations of PRC Concerning the Control over Passing Travellers’ Luggage and Articles

     (Effective Date:1991.09.10–Ineffective Date:)

   Article 1 The present regulations are formulated on the basis of the Customs Law of the People’s Republic of China and the Customs Regulations
of the People’s Republic of China Concerning the Supervision and Control over Luggage and Article of Incoming and Outgoing Passengers.

   Article 2 For the purpose of the present regulations, the term “passing Travellers” means passengers who come from a place outside the territory
and pass through the territory en route to a place outside the territory with valid passing visa (or with valid passport for passengers
come from countries which are mutually visa-free with our country); and incoming passengers who do not leave the Customs surveillance
zone or not leave the means of transport under the Customs control before leaving the territory.

   Article 3 Passing travellers, who do not leave the Customs surveillance zone or not leave the means of transport under the Customs control
at the port of entry may be exempted from filling the “Declaration Form for Passengers’ Luggage”. The Customs shall not examine the
luggage of these passengers except those Customs deemed necessary for an inspection.

   Article 4 Luggage carried by passing travellers who leave the Customs surveillance zone during the passing period shall be limited as their
travelling necessities and be dealt with in accordance with Customs regulations on luggage for inward and outward shortterm passengers
of non-residents, those belong to the items 3, 4 and 5 in the Classification List of Luggage and Articles of Incoming and Outgoing
Passengers (see Annex I) shall be released with temporary duty-exemption after being verified and noted by the Customs with in the
regulated scope, and the travelling passengers shall take back these luggage and articles when they leave the territory. Luggage
and articles beyond the regulated scope shall not be permitted in, except for those to be dealt with according to Article 5 of the
present regulations.

   Article 5 Articles carried by travelling passengers beyond the releasing scope prescribed in Article 4 of the present regulations shall be
undertaken by the Customs approved or appointed company engaged in declaration and transportation which entrusted by the passengers,
and the company shall complete the formalities of Customs transit goods for these articles, otherwise the articles shall not be permitted
in.

   Article 6 Except for those release by the special approval of the Customs General Administration with duty-payment or guarantee, articles not
permitted in shall be taken back and cleared with related Customs formalities by the owner of the article within 3 months from the
day which the articles are declared for entering the territory. Those do not complete with the above-mentioned formalities within
the prescribed time-limit shall be dealt with in accordance with Article 33 of the Customs Law of the People’s Republic of China.

   Article 7 Transit articles approved by the Customs and travelling necessities with temporary duty-exemption after Customs registration shall
not be left within the territory without the Customs authorization. Article unable to be taken back by reasons of lost, stolen or
force majeure shall be provided with approving documents issued by the public security office and the person concerned shall go through
the Customs clearance procedures. Those without approving documents shall have the duties paid.

   Article 8 No passing traveller shall be allowed to take articles listed in the List of Article Prohibited by the People’s Republic of China
from Entering or Leaving the Territory (see Annex II) no matter he leaves the Customs surveillance zone or not.

   Article 9 Any activity of the passing travellers in violation of the present regulations shall be punished in accordance with the Customs Law
of the People’s Republic of China and the Regulations for Imposing Administrative Penalties under the Customs Law of the People’s
Republic of China.

   Article 10 The present regulations shall be put into effect as of September 10, 1991.

ANNEX I

CLASSIFICATION LIST OF LUGGAGE AND ARTICLES OF INCOMING AND OUTGOING PASSENGERS

Item I Foodstuffs, clothing materials, clothes and works of arts and crafts, Watches and other daily necessities valued less than
RMB 200 yuan (including RMB 200 yuan)

Item II Cigarettes Wine and spirits

Item III Daily necessities valued more than RMB 1,000 yuan

Item IV TV sets, washing machines, refrigerators, cameras, audio systems, radio cassette recorders, motorcycles and other daily necessities
valued between RMB 500 yuan and RMB 1,000 yuan (including RMB 1,000 yuan)

Item V Typewriters Electronic keyboard, cameras and other daily necessities valued between RMB 200 yuan and RMB 500 yuan (including
RMB 500 yuan)

Notes:

1. The value of the inward articles referred to in the List shall be determined by reference of the duty-paying value assessed by
the Customs. The value of the outward articles shall be the prices listed on the domestic legal commercial invoices.

2. The specific allowances for duty-paying or duty-free articles in the List, which is allowed to be carried by various kinds of passengers,
shall be regulated by the Customs General Administration separately.

3. Named articles without value-limitation in the List shall not be classified by their valueness.

ANNEX II

LIST OF ARTICLES PROHIBITED BY THE PEOPLE’S REPUBLIC OF CHINA FROM ENTERING OR LEAVING THE TERRITORY

I Articles prohibited from entering the territory

1. Arms, ammunition and explosives of all kinds;

2. Counterfeit currencies and counterfeit negotiable securities;

3. Printed matter, films, photographs, gramophone records, cinematographic films, loaded recording tapes and video-tapes, compact
discs (video and audio), storage medium for the computer and other articles which are detrimental to the political, economic, cultural
and moral interests of China;

4. Deadly poisons of all kinds;

5. Opium, morphia, heroin, marijuana and other addiction-inducing drugs and psychedelics;

6. Animals, plants and products thereof infected with or carrying disease germs, insect pests and other harmful organisms;

7. Foodstuff, medicines and other articles coming from epidemic-striken areas and harmful to man and live-stock or those capable of
spreading diseases;

8. Renminbi (with the exception of Renminbi dealt with the carried in compliance with an agreement or protocol on the exchange of
national currencies in the case of Foreign Exchange Certificates, relevant regulations shall be applied).

II Articles prohibited from leaving the territory

1. All articles enumerated as articles prohibited from importation;

2. Manuscripts, printed matter, films, photographs, gramophone records, cinematographic films, loaded recording tapes, video-tapes,
compact discs (video and audio), storage medium for the computer and other articles which involve state secrets;

3. Valuable cultural relics and other relics prohibited from exportation;

4. endangered and rare animals and plants (including their specimens) and their seeds or reproducing materials.

    






MEASURES FOR THE ADMINISTRATION OF THE MOUNTAINEERING CONDUCTED BY FOREIGNERS IN CHINA

Category  SPORTS Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1991-08-29 Effective Date  1991-08-29  


Measures for the Administration of the Mountaineering Conducted by Foreigners in China

Chapter I  General Provisions
Chapter II  Procedures for Conducting Mountaineering in China
Chapter III  Mountaineering Activities
Chapter IV  Mountaineering Expeditions with Scientific Investigation and
Chapter V  Entry and Exit of Mountaineering Equipments and Supplies
Chapter VI  Penalty Provisions
Chapter VII  Supplementary Provisions

(Approved by the State Council on July 31, 1991, and promulgated by

Decree No. 16 of the State Physical Culture and Sports Commission on
August 29, 1991)
Chapter I  General Provisions

    Article 1  These Measures are  formulated to  strengthen the
administration of the  mountaineering  conducted by  foreigners in China,
develop  international  mountaineering  exchanges in an organized way, and
promote  mountaineering in China.

    Article 2  These Measures apply to the mountaineering by foreigners in
China involving the following peaks open to foreigners and concurrent conduct
of scientific investigations and surveys in regions around these peaks during
the climb:

    (1) peaks above 5,000 metres above sea level in the Tibet Autonomous
Region;

    (2) peaks above 3,500 metres above sea level in other provinces and
autonomous regions.

    Article 3  Foreigners  conducting  mountaineering  in  China shall abide
by the laws of China, and their legitimate rights and interests shall be
protected by the laws of China.

    Article 4  The administration of the mountaineering conducted by
foreigners in China shall follow the principle of authorities at various
levels assuming their respective responsibilities under a unified leadership.

    Article 5  The opening of a peak to foreigners shall be announced by the
Physical Culture and Sports Commission (hereinafter referred to as the State
Sports Commission) and the Ministry of Public Security of the People’s
Republic of China.
Chapter II  Procedures for Conducting Mountaineering in China

    Article 6  Foreigners coming to China for mountaineering may either
organize their own expedition or form a joint expedition with a Chinese team.

    Article 7  Foreigners coming to China for mountaineering shall submit a
written application to the State Sports Commission.

    If foreigners organize their own expedition, they shall submit the
application in the name of the expedition or may entrust a provincial or
autonomous regional mountaineering association of China to submit the
application on behalf of the expedition.

    In the case of a joint expedition formed by foreigners with a Chinese
team, the application shall be made by the Chinese team.

    Article 8  The State Sports Commission shall decide whether to approve or
disapprove an application within 60 days after the receipt of the application
from a foreign expedition or a Chinese-foreign joint one, and shall notify,
in written form, its decision to the foreign or the Chinese-foreign joint
expedition, or to the provincial or autonomous regional mountaineering
association which has made the application on behalf of a foreign expedition,
as well as to the sports commission of the province or autonomous region
where the mountaineering activities are to take place.

    Article 9  After being notified of the approval by the State Sports
Commission, the foreign expedition shall pay the registration fee as notified
and sign a mountaineering protocol with the unit designated in the
notification.

    The unit that signs the mountaineering protocol (hereinafter referred to
as the Chinese signatory) with a foreign expedition shall promptly submit a
copy of the protocol to the State Sports Commission to be put on record.

    Article 10  The protocol shall not be altered in substance at will after
it has been submitted to the State Sports Commission and put on record. When
any alteration is needed, it is subject to the confirmation by both the
Chinese and foreign signatories through consultation. Any change in the
season, route or destination of a climb shall be reported to the State Sports
Commission for reexamination and new approval.

    Article 11  The foreign expedition shall, one month before its entry into
China, remit to the Chinese signatory all the budgeted expenses for its
mountaineering in China, and secure visas from the Chinese embassy or
consulate as notified by the State Sports Commission.
Chapter III  Mountaineering Activities

    Article 12  Before starting a climb, the foreign expedition shall make
arrangements to provide insurance for the accompanying Chinese citizens and
adopt workable measures to protect natural environment in the mountain areas
in accordance with the requirements of the State Sports Commission.

    Article 13  Foreign mountaineers in China shall observe the following
rules:

    (1) The climb shall aim at the peak along the route approved by the State
Sports Commission, and may not aim at any other peak or depart from the
approved route. No mutual assignment of peaks to be climbed or routes to be
followed is allowed between foreign expeditions.

    (2) A foreign expedition may not admit as its own member a member from
any other expedition.

    (3) Permission from the State Sports Commission is needed if a foreign
expedition intends to display a national flag of the country the expedition
represents, and a national flag of similar size of the People’s Republic of
China shall be displayed simultaneously.

    (4) The names and altitudes of the peaks promulgated by the relevant
departments of the Chinese Government shall be the standard ones whenever
referred to.

    (5) Climbing routes and camps shall be kept clean. No momentos or any
other things shall be left in the climbing areas without permission.

    (6) Results of the expedition and any accident occurring during the climb
shall be promptly reported to the State Sports Commission and the Chinese
signatory.

    Article 14  The foreign mountaineering expedition shall write a report
upon completing a climb.

    The report and all the audio and video recordings made during the climb
shall be given gratis to the State Sports Commission and the sports
commission of the province or autonomous region where the climb has taken
place.

    Article 15  A certificate shall be issued to the foreign mountaineer who
has reached the summit of a peak and whose success has been confirmed by the
State Sports Commission.

    Article 16  Foreign mountaineers must be accompanied by Chinese liaison
officials during their climb in China. The liaison officials shall be
designated by the Chinese signatory and their duties are as follows:

    1. to assist and supervise foreigners in carrying out relevant
regulations of China;

    2. to help foreigners to solve problems arising from their climb;

    3. to report related matters to the Chinese signatory;

    4. to mediate disputes between foreigners and Chinese service personnel.

    Article 17  Where foreign mountaineers need services of Chinese citizens,
the matter shall be handled by the liaison officials.

    Charges may be collected for the services provided by Chinese citizens.
The categories and rates of service charges shall be published by the State
Sports Commission.

    Article 18  The foreign expedition shall provide the accompanying Chinese
citizens with medical care, first-aid treatments and equipments needed for
camping and cooking.

    Without the consent of the Chinese liaison officials, the foreign
expedition may not dismiss any Chinese citizen it has employed or suspend the
subsidies.

    In the case of a Chinese-foreign joint expedition, the methods for
providing the accompanying Chinese citizens with medical care, firstaid
treatments and equipments for camping and cooking shall be determined through
consultation by the two parties.
Chapter IV  Mountaineering Expeditions with Scientific Investigation and
Survey

    Article 19  For mountaineering with concurrent scientific investigation
and survey, a plan for such scientific investigation and survey shall be
submitted to the State Sports Commission simultaneously with the application
for mountaineering. The State Sports Commission shall forward the plan to the
State Science and Technology Commission or the State Survey and Drawing
Bureau for examination and approval.

    Before a plan for scientific investigation and survey is approved,
foreign climbers may not carry out any systematic observation of the living
beings, rocks, minerals, ice and snow, water and soil in the areas they pass
through. Nor may they collect specimens, samples or fossils or engage in the
work of survey and drawing.

    Article 20  Any foreign expedition or Chinese-foreign joint expedition
which has undertaken concurrent scientific investigation and survey shall
submit the following specimens and data to the State Science and Technology
Commission through the Chinese signatory:

    (1) a list of the specimens, samples and fossils collected;

    (2) any new species of animals or plants and any special taxon of animals
and plants that have been discovered;

    (3) holo-type specimens of the new species of animals or plants and the
specimens of especially rare of the animals or plants collected;

    (4) the results of laboratory analyses of specimens, samples and fossils;

    (5) a copy of the audio-visual recordings of the concurrent scientific
investigation and survey during the mountaineering.

    The foreign or Chinese-foreign joint expedition that has conducted survey
and drawing shall submit to the State Survey and Drawing Bureau a copy or
reproduction of the results of its work through the Chinese signatory.
Chapter V  Entry and Exit of Mountaineering Equipments and Supplies

    Article 21  Foreigners bringing articles for mountaineering into China
shall declare them to the Customs as “specially permitted import” or
“provisional import” as the case may be. After the verification and
permission by the Customs, the formalities relating to the Customs duties and
guarantees shall be gone through.

    Article 22  A reasonable amount of consumer goods, including special
provisions, medicines for first-aid, cold-proof clothes and fuel needed by
mountaineers, may be brought into China as specially permitted duty-free
articles. Duties shall be levied for articles exceeding the reasonable amount.

    With the permission of relevant government departments, apparatus for
communication, photography, video taping, survey and drawing, and special
means of transportation may be brought into China as provisionally duty-free
articles. After the mountaineering, these articles shall be out of China. If
this is not possible due to special reasons, due formalities shall be
completed through the State Sports Commission according to relevant
regulations of the State.

    Article 23  The specimens, samples and fossils collected and the
audio-visual materials produced by a foreign or Chinese-foreign joint
expedition may be taken out of China only after they have been inspected and
permitted by the relevant departments.
Chapter VI  Penalty Provisions

    Article 24  The State Sports Commission or the sports commissions at
provincial or autonomous regional level may impose such penalties as a
warning, a fine ranging from 5,000 to 50,000 yuan (RMB), or cessation of the
mountaineering depending on the seriousness of each case on foreign
mountaineers who have violated the stipulations in Articles 12, 13, 18, 19
and 20 of these Measures, or who have conducted mountaineering without
permission of the State Sports Commission.

    For those who have violated the stipulations in Articles 19 and 20 of
these Measures, the State Sports Commission or the sports commissions at the
provincial or autonomous regional level may penalize separately or in
addition to the penalties mentioned in the paragraph above, the violators by
seizing the specimens, samples and fossils they have collected as well as the
materials they have produced.

    Article 25  Where a party concerned refuses to accept the administrative
penalty decision, the party may apply for administrative reconsideration of
case according to the relevant laws and regulations of China. Where the party
concerned refuses to accept the reconsideration decision, an administrative
lawsuit may be filed according to the relevant laws of China. Where the party
concerned neither apply for reconsideration nor file an administrative
lawsuit within a prescribed time limit, while refusing to comply with the
penalty decision on expiry of the time limit, the administrative department
which decided on the penalty may apply for a compulsory enforcement by the
people’s court.
Chapter VII  Supplementary Provisions

    Article 26  The mountaineering in the mainland conducted by compatriots
from Taiwan, Hong Kong and Macao shall be administered with reference to
these Measures.

    Article 27  The State Physical Culture and Sports Commission shall be
responsible for the interpretation of these Measures.

    Article 28  These Measures shall go into effect as of the date of
promulgation.






OFFICIAL REPLY OF THE GENERAL ADMINISTRATION OF CUSTOMS AND THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION CONCERNING THE RECOGNITION OF CAPITAL CONTRIBUTION OF ENTERPRISES INVESTED BY OVERSEA CHINESE AND COMPATRIOTS FROM HONG KONG, MACAO AND TAIWAN

The General Administration of Customs, the Ministry of Foreign Trade and Economic Cooperation

Official Reply of the General Administration of Customs and the Ministry of Foreign Trade and Economic Cooperation Concerning the
Recognition of Capital Contribution of Enterprises Invested by Oversea Chinese and Compatriots from Hong Kong, Macao and Taiwan

ShuJianYi [1991] No.786

July 19, 1991

Guangzhou Customs:

Your telegraph dated June 13 has been received. We have studied the request of Zhaoqing Hengjin Electronic Limited Company for preferential
treatments stated in the Decree No.64 of the State Council and conclude that, in accordance with Article 4 of the Law on Chinese-foreign
Equity Joint Ventures, the proportion of foreign investment in a Chinese-foreign equity joint venture is generally not lower than
25%. According to this principle, overseas Chinese investors and compatriot investors from Hong Kong, Macao and Taiwan should contribute
no less than 25% of the registered capital of the joint ventures they invest in so as to classify these joint ventures as those invested
by overseas Chinese and compatriots from Hong Kong, Macao and Taiwan. Therefore, the request of Zhaoqing Hengjin Electronic Limited
Company should be handled in line with the related provisions of the country on enterprises with foreign investment.

That is hereby the reply.



 
The General Administration of Customs, the Ministry of Foreign Trade and Economic Cooperation
1991-07-19

 







INTERIM PROVISIONS ON FIXED ASSETS INVESTMENT DIRECTION REGULATING TAX

Category  TAXATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1991-04-16 Effective Date  1991-01-01  


Interim Provisions of the People’s Republic of China on Fixed Assets Investment Direction Regulating Tax


Appendix I  FAID Regulating Tax Schedule of Taxable Items and Tax Rates
APPENDIX II  Schedule of Development Projects Banned by the State

(Promulgated by Decree No. 82 of the State Council of the People’s

Republic of China on April 16, 1991)

    Article 1  With a view to carrying out state industrial policies,
controlling investment scope, guiding investment direction, regulating
investment structure, strengthening key constructions, and promoting
sustained, stable and coordinated development of national economy, the present
Provisions are formulated.

    Article 2  All units and individuals who are engaged in investment in
fixed assets within the territory of the People’s Republic of China are
obligated taxpayers (hereinafter referred to as taxpayers) of fixed assets
investment direction regulating tax (hereinafter abbreviated to FAID
regulating tax) and shall pay FAID regulating tax in accordance with
stipulations of the present Provisions.

    Article 3  Different tax rates shall be applied to FAID regulating tax
according to state industrial policy and economic scale of project. Fixed
assets investment projects shall have applicable tax rates determined in the
light of scale of project unit. Taxable items and tax rates shall be applied
according to the FAID Regulating Tax Schedule of Taxable Items and Tax Rates
attached to the present Provisions.

    Fixed assets investment (except investment in replacements and technical
innovations) that are not listed in the Schedule of Taxable Items and Tax
Rates shall be subject to a tax rate of 15%.

    Investment in replacements and technical innovations other than those
listed within the category of 0% according to the Schedule of Taxable Items
and Tax Rates shall be subject to a tax rate of 10%.

    FAID Regulating Tax Schedule of Taxable Items and Tax Rates may be revised
by the State Council when it so decides.

    Article 4  Calculation of payable FAID regulating tax shall be based on
actually realized amount of investment in a fixed assets investment project
and in case of replacements and technical innovation projects the
calculation shall be based on actually realized amount of investment in
construction project.

    Article 5  FAID regulating tax upon a fixed assets investment project
shall be paid in a year’s advance based on annual investment budget for
each project unit. At the end of the year, tax accounts shall be squared on
the basis of actually realized investment amount with excessive payment of
tax refunded or tax due repaid. Upon completion of the whole project, the
tax accounts shall be cleared on the basis of actually realized total
investment amount with excessive payment of tax refunded or tax due repaid.

    Any taxpayer who really has difficulty in fully paying in advance tax upon
the whole year’s budgeted investment may, subject to examination and
approval of the tax authority, pay by installments the total amount by the end
of September of the very year.

    Article 6  When a taxpayer applies for approval of a fixed assets
investment project the taxpayer shall make sure that payment for FAID
regulating tax has been effectively arranged for. FAID regulating tax shall
be included in total investment budget and covered by economic and financial
assessment of the project. But tax payment may not be taken into account
when payment for design, construction or other fees are charged.

    Article 7  FAID regulating tax may not be reduced or exempted except
otherwise prescribed by the State Council.

    Article 8  FAID regulating tax shall be collected and administered by the
tax authority. Taxpayers shall go through procedures of tax
registration, tax authentication and tax declaration with the tax bureau of
the locality where the project is sited.

    Article 9  Collection of FAID regulating tax shall be brought under a
source control mechanism that combines planned unified management with
an investment license system as is detailed in the following:

    (1) Planning commissions or planning and economic commissions of
different provinces, autonomous regions, municipalities under the direct
leadership of the Central Government and of separate-planning municipalities
shall get together written project programmes on fixed assets investments
in respective locality and transmit to lower levels taxable items, tax rates
and tax amount to be applied to different fixed assets investment projects
subject to examination and decision of the tax authority at the same level.

    (2) Taxpayers shall go to the tax bureau of the locality where the
project is sited to go through procedures of tax registration and declaration
etc. before they begin injecting annual investment. Banks and other financial
institutions shall transfer the amount of tax upon presentation of the special
tax payment notice paper issued by the tax authority.

    (3) Planning commissions or planning and economic commissions shall issue
the investment permit upon presentation of the receipt of tax payment. Banks
and other financial institutions shall proceed with allotment of funds or
loans to fixed assets investment projects upon presentation of the investment
permit.

    Article 10  Payment for FAID regulating tax shall be withheld and
transferred by the Chinese People’s Construction Bank, the China Industrial
and Commercial Bank, the China Agricultural Bank, the Bank of China, the
Transportation Bank and other financial institutions or relevant units.

    Article 11  For fixed assets investment projects beyond planning, the
taxpayers may, in addition to payment of tax at applicable tax rates, be
imposed on by the tax authority a fine as much as less than five times amount
of tax that should be paid. But fixed assets investments beyond planning that
are listed within the category of 0% tax rate shall be handled by relevant
planning departments according to correspondent stipulations.

    Investments in capital construction conducted under the pretext of
replacements and renovations projects shall be imposed upon double amount of
tax payable according to taxable items and tax rates applied to capital
construction investments. But capital construction investments that are listed
within the category of 0% tax rate shall be handled by relevant planning
departments according to corresponding stipulations.

    Article 12  In case a taxpayer fails to pay tax according to the present
Provisions, planning commissions or planning and economic commissions shall
cancel establishment of the project if it is at preparatory stage, or shall
withhold arrangement for construction of the project if it has just been
ready for construction, or shall cancel the annual investment budget if it
is at the stage of continued construction and, additionally, shall revoke
the investment permit. Banks and other financial institutions shall
withhold from loaning or allotting funds to such project.

    In case planning departments or banks violate the present Provisions to
the consequence of tax evasion, relevant authorities at higher level shall
investigate into responsibilities of concerned offenders.

    Article 13  Other matters over management of collection of FAID
regulating tax shall be handled according to stipulations of the Interim
Provisions of the People’s Republic of China on Management of Tax Collection.

    Article 14  The present Provisions are not applicable to investments in
fixed assets by Sino-foreign equity joint ventures, Sino-foreign
cooperative enterprises or solely foreign funded enterprises.

    The present Provisions are not applicable to investments in development
items banned by the state. Such investments cases shall be separately
handled by planning departments according to corresponding state laws,
regulations, guidelines and policies. Schedule of State Banned Development
Items may be revised by the State Council when it so decides.

    Article 15  Preferential treatment with FAID regulating tax to be applied
to regions of minor nationalities shall be provided for separately.

    Procedures on collection, reduction and exemption of FAID regulating tax
upon fixed assets investments with less than 50,000 yuan that, according to
state regulations, fall beyond planned management, shall be decided by
people’s governments of provinces, autonomous regions and municipalities
under the direct leadership of the Central Government.

    Article 16  Fixed assets investment permits shall be issued and managed
in a unified manner by planning departments. Rules on permit management
shall be formulated by the State Planning Commission.

    Article 17  Interpretation of the present Provision shall be in the
responsibility of the State Tax Bureau. Detailed rules for implementation
may be formulated by the State Tax Bureau.

    Article 18  The present Provisions shall come into effect as of the
year 1991. The Interim Provisions of the People’s Republic of China on
Construction Tax which was promulgated by the State Council on June 25, 1987
shall be annulled ever since the same year.

Appendix I  FAID Regulating Tax Schedule of Taxable Items and Tax Rates



Categories                      Taxable
Items                      
Tax Rates

                            
(Investment projects)

1. Agriculture,      Projects for control of big and small rivers     0%
Forestry and           including flood prevention project, dam,
Water Conservancy      floodgate, flood storage and control

                      
reservoir, flood-control dam,

                      
flood-diversion project, river realignment,

                      
danger reservoir reinforcement,

                      
flood-control communication equipment;

                    

                     Projects
for irrigation and drainage including   0%

                      
water storage, water diversion, water

                      
up-pumping, water discharge, water allotment,

                      
water saving, water drainage and

                      
flood-discharge;

                    

                     Farmland
and water conservancy, water and soil   0%

                      
conservancy;

                                          

                     Improvement
of medium- and high-yield            0%

                      
cultivated land;

                    

                     Development
of beaches and wasteland;            0%

                    

                     Breeding
of fine seeds and varieties;            0%

                    

                     Stations
of technical services in animal         0%

                      
husbandry, livestock medical science,

                      
acquatic products, agricultural machines and

                      
water conservancy;

                    

                     Poultry and
livestock farm;                      0%

                      

                     Construction
of fishing port and fishery base    0%

                      
(except for those that occupy arable land);

                    

                     Deep-sea
fishery and purchase of fishing boat;   0%

                    

                     Acquaculture
(except for where arable land is    0%

                      
occupied);

                    

                     Spreading
of agricultural, forestry and water    0%

                      
conservancy technologies;

                    

                     Commodity
base of grain, cotton and edible oil;  0%

                    

                     Monitor,
authentication and technical            0%

                      
supervision of agricultural machinery;

                    

                     Supplementary
and compound forages;              0%

                    

                     Base of fine
agricultural and side-line          0%

                      
products;

                    

                     Forage monitoring
and testing station;           0%

                    

                     Fertilizer,
chemicals and animal medicines       0%

                      
monitoring and testing station;

                    

                     Shelter-forest
project;                          0%

                    

                     Construction
of nature preserves;                0%

                    

                     Forestry
protection;                            
0%

                    

                     Construction
of quick-grown high-yield forest;   0%

                    

                     Construction
of bases for protection and         0%

                      
raising of wild animals;

                    

                     Well-known,
excellent and special economic       0%

                      
forests;

                    

                     Plantation
of Chinese medical herbs;             0%

                    

                     Cultivation
of forests of middle age and         0%

                      
young growth;

                    

                     Cultivation
of forestry seedlings;               0%

                    

                     Afforestation
and forestry resource reclamation  0%

                      
projects;

                    

                     Animal and
plant quarantine;                    
0%

                    

                     Construction
of grazing land;                    0%

                    

                     Construction
of meteorological and hydrological  0%

                      
installments;

                    

                     Water diversion
and water supply projects;       0%

                    

                     Protection
of water resources and resettlements  0%

                      
of residents in the zone of reservoir.

                    
2. Energy Industry

                      

   Coal              Coal mining (except for small
coalpits without   0%

                      
construction license);

                    

                     Exploitation
of coal gas;                        0%

                    

                     Exploitation
and utilization of low calorie      0%

                      
fuels;

                    

                     Mechanized
exploitation and dressing of coking   0%

                      
coal with a capacity of 200,000 tons and

                      
above;

                      

                     Mechanized
exploitation of coking coal with      30%

                      
a capacity of lower than 200,000 tons.

                    

   Electricity       Thermal power generating unit, nuclear power,    0%

                      
projects of big, medium and small hydropower

                      
station, thermoelectric joint-generating and

                      
energy-saving set, power transmission and

                      
transformation projects with a capacity of

                      
100,000 kilowatts and above;

                    

                     Thermal power
or steam-condensing generating     5%

                      
set with a capacity ranging from 25,000

                      
kilowatts to 100,000 kilowatts within a

       &

RULES FOR THE IMPLIMENTATION OF THE INCOME TAX LAW OF THE PEOPLE’S REPUBLIC OF CHINA FOR ENTERPRISES WITH FOREIGN INVESTMENT AND FOREIGN ENTERPRISES

OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ON THE ISSUE CONCERNING INVESTMENT RECLAIM IN ADVANCE BY THE FOREIGN COPARTNER OF THE CHINESE-FOREIGN CONTRACTUAL JOINT VENTURES DURING THE TERM OF COOPERATION

The State Administration of Taxation

Official Reply of the State Administration of Taxation on the Issue Concerning Investment Reclaim in Advance by the Foreign Copartner
of the Chinese-foreign Contractual Joint Ventures during the Term of Cooperation

GuoShuiHanFa [1991] No.502

April 9, 1991

Hunan Tax Bureau:

The document Request for Instructions Concerning Investment Reclaim in Advance by the Foreign Copartner of the Chinese-foreign Contractual
Joint Ventures During the Term of Cooperation coded XiangShuiHan [1991] No.99 on March 25, 1991 has been received. The Paragraph
2 of Article 22 of the Law of Chinese-foreign Contractual Joint Ventures stating that the investment reclaim by the foreign copartner
of the contractual joint ventures before paying the income tax means that the foreign copartner can reclaim the investment by way
of depreciation of fixed assets. The contractual joint ventures that the cooperation term is shorter than the term of depreciation
of fixed assets stated in the taxation regulations and all the assets belong to the Chinese copartner after the cooperation term
stipulated in the contract can apply the State Administration of Taxation by the contractual joint ventures for the approval that
they reclaim the investment by the accelerating depreciation of the fixed assets.



 
The State Administration of Taxation
1991-04-09

 







INCOME TAX LAW FOR ENTERPRISES WITH FOREIGN INVESTMENT AND FOREIGN ENTERPRISES

Category  TAXATION Organ of Promulgation  The National People’s Congress Status of Effect  In Force
Date of Promulgation  1991-04-09 Effective Date  1991-07-01  


Income Tax Law of the People’s Republic of China for Enterprises With Foreign Investment and Foreign Enterprises



(Adopted at the Fourth Session of the Seventh National People’s Congress

on April 9, 1991, promulgated by Order No. 45 of the President of the
People’s Republic of China on April 9, 1991 and effective as of July 1, 1991)

    Article 1  Income tax shall be paid in accordance with the provisions of
this Law by enterprises with foreign investment within the territory of the
People’s Republic of China on their income derived from production, business
operations and other sources.

    Income tax shall be paid in accordance with the provisions of this Law by
foreign enterprises on their income derived from production, business
operations and other sources within the territory of the People’s Republic of
China.

    Article 2  “Enterprises with foreign investment” referred to in this Law
mean Chinese-foreign equity joint ventures, Chinese-foreign contractual joint
ventures and foreign-capital enterprises that are established in China.

    “Foreign enterprises” referred to in this Law mean foreign companies,
enterprises and other economic organizations which have establishments or
places in China and engage in production or business operations, and which,
though without establishments or places in China, have income from sources
within China.

    Article 3  Any enterprise with foreign investment which establishes its
head office in China shall pay its income tax on its income derived from
sources inside and outside China. Any foreign enterprise shall pay its income
tax on its income derived from sources within China.

    Article 4  The taxable income of an enterprise with foreign investment
and an establishment or a place set up in China to engage in production or
business operations by a foreign enterprise, shall be the amount remaining
from its gross income in a tax year after the costs, expenses and losses have
been deducted.

    Article 5  The income tax on enterprises with foreign investment and the
income tax which shall be paid by foreign enterprises on the income of their
establishments or places set up in China to engage in production or business
operations shall be computed on the taxable income at the rate of thirty
percent, and local income tax shall be computed on the taxable income at the
rate of three percent.

    Article 6  The State shall, in accordance with the industrial policies,
guide the orientation of foreign investment and encourage the establishment
of enterprises with foreign investment which adopt advanced technology and
equipment and export all or greater part of their products.

    Article 7  The income tax on enterprises with foreign investment
established in Special Economic Zones, foreign enterprises which have
establishments or places in Special Economic Zones engaged in production or
business operations, and on enterprises with foreign investment of a
production nature in Economic and Technological Development Zones, shall be
levied at the reduced rate of fifteen percent.

    The income tax on enterprises with foreign investment of a production
nature established in coastal economic open zones or in the old urban
districts of cities where the Special Economic Zones or the Economic and
Technological Development Zones are located, shall be levied at the reduced
rate of twenty-four percent.

    The income tax on enterprises with foreign investment in coastal economic
open zones, in the old urban districts of cities where the Special Economic
Zones or the Economic and Technological Development Zones are located or in
other regions defined by the State Council, within the scope of energy,
communications, harbour, wharf or other projects encouraged by the State, may
be levied at the reduced rate of fifteen percent. The specific measures shall
be drawn up by the State Council.

    Article 8  Any enterprise with foreign investment of a production nature
scheduled to operate for a period of not less than ten years shall, from the
year beginning to make profit, be exempted from income tax in the first and
second years and allowed a fifty percent reduction in the third to fifth
years. However, the exemption from or reduction of income tax on enterprises
with foreign investment engaged in the exploitation of resources such as
petroleum, natural gas, rare metals, and precious metals shall be regulated
separately by the State Council. Enterprises with foreign investment which
have actually operated for a period of less than ten years shall repay the
amount of income tax exempted or reduced already.

    The relevant regulations, promulgated by the State Council before the
entry into force of this Law, which provide preferential treatment of
exemption from or reduction of income tax on enterprises engaged in energy,
communications, harbour, wharf and other major projects of a production
nature for a period longer than that specified in the preceding paragraph, or
which provide preferential treatment of exemption from or reduction of income
tax on enterprises engaged in major projects of a nonproduction nature, shall
remain applicable after this Law enters into force.

    Any enterprise with foreign investment which is engaged in agriculture,
forestry or animal husbandry and any other enterprise with foreign investment
which is established in remote underdeveloped areas may, upon approval by the
competent department for tax affairs under the State Council of an
application filed by the enterprise, be allowed a fifteen to thirty percent
reduction of the amount of income tax payable for a period of another ten
years following the expiration of the period for tax exemption or reduction
as provided for in the preceding two paragraphs.

    After this Law enters into force, any modification to the provisions of
the preceding three paragraphs of this Article on the exemption from or
reduction of income tax on enterprises shall be submitted by the State
Council to the Standing Committee of the National People’s Congress for
decision.

    Article 9  The exemption from or reduction of local income tax on any
enterprise with foreign investment which operates in an industry or
undertakes a project encouraged by the State shall, in accordance with the
actual situation, be at the discretion of the people’s government of the
relevant province, autonomous region or municipality directly under the
Central Government.

    Article 10  Any foreign investor of an enterprise with foreign investment
which reinvests its share of profit obtained from the enterprise directly
into that enterprise by increasing its registered capital, or uses the profit
as capital investment to establish other enterprises with foreign investment
to operate for a period of not less than five years shall, upon approval by
the tax authorities of an application filed by the investor, be refunded
forty percent of the income tax already paid on the reinvested amount. Where
regulations of the State Council provide otherwise in respect of preferential
treatment, such provisions shall apply. If the investor withdraws its
reinvestment before the expiration of a period of five years, it shall repay
the refunded tax.

    Article 11  Losses incurred in a tax year by any enterprise with foreign
investment and by an establishment or a place set up in China by a foreign
enterprise to engage in production or business operations may be made up by
the income of the following tax year. Should the income of the following tax
year be insufficient to make up for the said losses, the balance may be made
up by its income of the further subsequent year, and so on, over a period not
exceeding five years.

    Article 12  Any enterprise with foreign investment shall be allowed, when
filing a consolidated income tax return, to deduct from the amount of tax
payable the foreign income tax already paid abroad in respect of the income
derived from sources outside China. The deductible amount shall, however, not
exceed the amount of income tax otherwise payable under this Law in respect
of the income derived from sources outside China.

    Article 13  The payment or receipt of charges or fees in business
transactions between an enterprise with foreign investment or an
establishment or a place set up in China by a foreign enterprise to engage in
production or business operations, and its associated enterprises, shall be
made in the same manner as the payment or receipt of charges or fees in
business transactions between independent enterprises. Where the payment or
receipt of charges or fees is not made in the same manner as in business
transactions between independent enterprises and results in a reduction of
the taxable income, the tax authorities shall have the right to make
reasonable adjustment.

    Article 14  Where an enterprise with foreign investment or an
establishment or a place set up in China by a foreign enterprise to engage in
production or business operations is established, moves to a new site, merges
with another enterprise, breaks up, winds up or makes a change in any of the
main entries of registration, it shall present the relevant documents to and
go through tax registration or a change or cancellation in registration with
the local tax authorities after the relevant event is registered, or a change
or cancellation in registration is made with the administrative agency for
industry and commerce.

    Article 15  Income tax on enterprises and local income tax shall be
computed on an annual basis and paid in advance in quarterly instalments.
Such payments shall be made within fifteen days from the end of each quarter
and the final settlement shall be made within five months from the end of
each tax year. Any excess payment shall be refunded and any deficiency shall
be repaid.

    Article 16  Any enterprise with foreign investment and any establishment
or place set up in China by a foreign enterprise to engage in production or
business operations shall file its quarterly provisional income tax return in
respect of advance payments with the local tax authorities within the period
for each advance payment of tax, and it shall file an annual income tax
return together with the final accounting statements within four months from
the end of the tax year.

    Article 17  Any enterprise with foreign investment and any establishment
or place set up in China by a foreign enterprise to engage in production or
business operations shall report its financial and accounting systems to the
local tax authorities for reference. All accounting records must be complete
and accurate, with legitimate vouchers as the basis for entries.

    If the financial and accounting bases adopted by an enterprise with
foreign investment and an establishment or a place set up in China by a
foreign enterprise to engage in production or business operations contradict
the relevant regulations on tax of the State Council, tax payment shall be
computed in accordance with the relevant regulations on tax of the State
Council.

    Article 18  When any enterprise with foreign investment goes into
liquidation, and if the balance of its net assets or the balance of its
remaining property after deduction of the enterprise’s undistributed profit,
various funds and liquidation expenses exceeds the enterprise’s paidin
capital, the excess portion shall be liquidation income on which income tax
shall be paid in accordance with the provisions of this Law.

    Article 19  Any foreign enterprise which has no establishment or place in
China but derives profit, interest, rental, royalty and other income from
sources in China, or though it has an establishment or a place in China, the
said income is not effectively connected with such establishment or place,
shall pay an income tax of twenty percent on such income.

    For the payment of income tax in accordance with the provisions of the
preceding paragraph, the income beneficiary shall be the taxpayer and the
payer shall be the withholding agent. The tax shall be withheld from the
amount of each payment by the payer. The withholding agent shall, within five
days, turn the amount of taxes withheld on each payment over to the State
Treasury and submit a withholding income tax return to the local tax
authorities.

    Income tax shall be exempted or reduced on the following income:

    (1) the profit derived by a foreign investor from an enterprise with
foreign investment shall be exempted from income tax;

    (2) income from interest on loans made to the Chinese government or
Chinese State banks by international financial organizations shall be
exempted from income tax;

    (3) income from interest on loans made at a preferential interest rate to
Chinese State banks by foreign banks shall be exempted from income tax; and

    (4) income tax of the royalty received for the supply of technical
know-how in scientific research, exploitation of energy resources,
development of the communications industries, agricultural, forestry and
animal husbandry production, and the development of important technologies
may, upon approval by the competent department for tax affairs under the
State Council, be levied at the reduced rate of ten percent. Where the
technology supplied is advanced or the terms are preferential, exemption from
income tax may be allowed.

    Apart from the aforesaid provisions of this Article, if preferential
treatment in respect of reduction of or exemption from income tax on profit,
interest, rental, royalty and other income is required, it shall be regulated
by the State Council.

    Article 20  The tax authorities shall have the right to inspect the
financial, accounting and tax affairs of enterprises with foreign investment
and establishments or places set up in China by foreign enterprises to engage
in production or business operations, and have the right to inspect tax
withholding of the withholding agent and its payment of the withheld tax into
the State Treasury. The entities and the withholding agents being so
inspected must report the facts and provide relevant information. They may
not refuse to report or conceal any facts.

    When making an inspection, the tax officials shall produce their identity
documents and be responsible for confidentiality.

    Article 21  Income tax payable according to this Law shall be computed in
terms of Renminbi (RMB). Income in foreign currency shall be converted into
Renminbi according to the exchange rate quoted by the State exchange control
authorities for purposes of tax payment.

    Article 22  If any taxpayer fails to pay tax within the prescribed time
limit, or if the withholding agent fails to turn over the tax withheld within
the prescribed time limit, the tax authorities shall, in addition to setting
a new time limit for tax payment, impose a surcharge for overdue payment,
equal to 0.2 percent of the overdue tax for each day in arrears, starting
from the first day the payment becomes overdue.

    Article 23  The tax authorities shall set a new time limit for
registration or submission of documents and may impose a fine of five
thousand yuan or less on any taxpayer or withholding agent which fails to go
through tax registration or make a change or cancellation in registration
with the tax authorities within the prescribed time limit, or fails to submit
income tax return, final accounting statements or withholding income tax
return to the tax authorities within the prescribed time limit, or fails to
report its financial and accounting systems to the tax authorities for
reference.

    Where the tax authorities have set a new time limit for registration or
submission of documents, they shall impose a fine of ten thousand yuan or
less on the taxpayer or withholding agent which again fails to meet the time
limit for going through registration or making a change in registration with
the tax authorities, or for submitting income tax return, final accounting
statements or withholding income tax return to the tax authorities. Where the
circumstances are serious, the legal representative and the person directly
responsible shall be investigated for criminal responsibility by applying
mutatis mutandis the provisions of Article 121 of the Criminal Law.

    Article 24  Where the withholding agent fails to fulfil its obligation to
withhold tax as provided in this Law, and does not withhold or withholds an
amount less than that should have been withheld, the tax authorities shall
set a time limit for the payment of the amount of tax that should have been
withheld, and may impose a fine up to but not exceeding one hundred percent
of the amount of tax that should have been withheld.

    Where the withholding agent fails to turn the tax withheld over to the
State Treasury within the prescribed time limit, the tax authorities shall
set a time limit for turning over the taxes and may impose a fine of five
thousand yuan or less on the withholding agent; if the withholding agent
fails to meet the time limit again, the tax authorities shall pursue the
taxes according to law and may impose a fine of ten thousand yuan or less on
the withholding agent. If the circumstances are serious, the legal
representative and the person directly responsible shall be investigated for
criminal responsibility by applying mutatis mutandis the provisions of
Article 121 of the Criminal Law.

    Article 25  Where any person evades tax by deception or concealment or
fails to pay tax within the time limit prescribed by this Law and, after the
tax authorities pursued the payment of tax, fails again to pay it within the
prescribed time limit, the tax authorities shall, in addition to recovering
the tax which should have been paid, impose a fine up to but not exceeding
five hundred percent of the amount of tax which should have been paid. Where
the circumstances are serious, the legal representative and the person
directly responsible shall be investigated for criminal responsibility in
accordance with the provisions of Article 121 of the Criminal Law.

    Article 26  Any enterprise with foreign investment, foreign enterprise or
withholding agent, in case of a dispute with the tax authorities on payment
of tax, must pay tax according to the relevant regulations first. Thereafter,
the taxpayer or withholding agent may, within sixty days from the date of
receipt of the tax payment certificate issued by the tax authorities, apply
to the tax authorities at the next higher level for reconsideration. The
higher tax authorities shall make a decision within sixty days after receipt
of the application for reconsideration. If the taxpayer or withholding agent
is not satisfied with the decision, it may institute legal proceedings in the
people’s court within fifteen days from the date of receipt of the
notification on decision made after reconsideration.

    If the party concerned is not satisfied with the decision on punishment
by the tax authorities, it may, within fifteen days from the date of receipt
of the notification on punishment, apply for reconsideration to the tax
authorities at the next higher level than that which made the decision on
punishment. Where the party is not satisfied with the decision made after
reconsideration, it may institute legal proceedings in the people’s court
within fifteen days from the date of receipt of the decision made after
reconsideration. The party concerned may, however, directly institute legal
proceedings in the people’s court within fifteen days from the date of
receipt of the notification on punishment. If the party concerned neither
applies for reconsideration to the higher tax authorities, nor institutes
legal proceedings in the people’s court within the time limit, nor complies
with the decision on punishment, the tax authorities which made the decision
on punishment may apply to the people’s court for compulsory execution.

    Article 27  Where any enterprise with foreign investment which was
established before the promulgation of this Law would, in accordance with the
provisions of this Law, otherwise be subject to higher tax rates or enjoy
less preferential treatment of tax exemption or reduction than before the
entry into force of this Law, in respect to such enterprise, within its
approved period of operation, the law and relevant regulations of the State
Council in effect before the entry into force of this Law shall apply. If any
such enterprise has no approved period of operation, the law and relevant
regulations of the State Council in effect before the entry into force of
this Law shall apply within the period prescribed by the State Council.
Specific measures shall be drawn up by the State Council.

    Article 28  Where the provisions of a tax agreement concluded between the
government of the People’s Republic of China and a foreign government are
different from the provisions of this Law, the provisions of the agreement
shall prevail.

    Article 29  Rules for implementation shall be formulated by the State
Council in accordance with this Law.

    Article 30  This Law shall enter into force on July 1, 1991. The Income
Tax Law of the People’s Republic of China for ChineseForeign Equity Joint
Ventures and the Income Tax Law of the People’s Republic of China for Foreign
Enterprises shall be annulled as of the same date.






INCOME TAX LAW OF THE PEOPLE’S REPUBLIC OF CHINA ON ENTERPRISES WITH FOREIGN INVESTMENT AND FOREIGN ENTERPRISES

The Standing Committee of the National People’s Congress

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

No.45

“Income Tax Law of the People’s Republic of China on Enterprises with Foreign Investment and Foreign Enterprises” is adopted at the
Fourth Session of the Seventh National People’s congress on April 9, 1991, and is promulgated.This law will be effective as of July
1, 1991.

President of the People’s Republic of China: Yang Shangkun

April 9,1999

Income Tax Law of the People’s Republic of China on Enterprises with Foreign Investment and Foreign Enterprises

Article 1

Income tax shall be paid in accordance with the provisions of this Law by enterprises with foreign investment within the territory
of the People’s Republic of China on their income derived from production, business operations and other sources.

Income tax shall be paid in accordance with the provisions of this Law by foreign enterprises on their income derived from production,
business operations and other sources within the territory of the People’s Republic of China.

Article 2

“Enterprises with foreign investment” referred to in this Law mean Chinese-foreign equity joint ventures, Chinese-foreign contractual
joint ventures and foreign-capital enterprises that are established in China.

“Foreign enterprises” referred to in this Law mean foreign companies, enterprises and other economic organizations which have establishments
or places in China and engage in production or business operations, and which, though without establishments or places in China,
have income from sources within China.

Article 3

Any enterprise with foreign investment which establishes its head office in China shall pay its income tax on its income derived from
sources inside and outside China. Any foreign enterprise shall pay its income tax on its income derived from sources within China.

Article 4

The taxable income of an enterprise with foreign investment and an establishment or a place set up in China to engage in production
or business operations by a foreign enterprise, shall be the amount remaining from its gross income in a tax year after the costs,
expenses and losses have been deducted.

Article 5

The income tax on enterprises with foreign investment and the income tax which shall be paid by foreign enterprises on the income
of their establishments or places set up in China to engage in production or business operations shall be computed on the taxable
income at the rate of thirty percent, and local income tax shall be computed on the taxable income at the rate of three percent.

Article 6

The State shall, in accordance with the industrial policies, guide the orientation of foreign investment and encourage the establishment
of enterprises with foreign investment which adopt advanced technology and equipment and export all or greater part of their products.

Article 7

The income tax on enterprises with foreign investment established in Special Economic Zones, foreign enterprises which have establishments
or places in Special Economic Zones engaged in production or business operations, and on enterprises with foreign investment of a
production nature in Economic and Technological Development Zones, shall be levied at the reduced rate of fifteen percent.

The income tax on enterprises with foreign investment of a production nature established in coastal economic open zones or in the
old urban districts of cities where the Special Economic Zones or the Economic and Technological Development Zones are located, shall
be levied at the reduced rate of twenty-four percent.

The income tax on enterprises with foreign investment in coastal economic open zones, in the old urban districts of cities where the
Special Economic Zones or the Economic and Technological Development Zones are located or in other regions defined by the State Council,
within the scope of energy, communications, harbour, wharf or other projects encouraged by the State, may be levied at the reduced
rate of fifteen percent. The specific measures shall be drawn up by the State Council.

Article 8

Any enterprise with foreign investment of a production nature scheduled to operate for a period of not less than ten years shall,
from the year beginning to make profit, be exempted from income tax in the first and second years and allowed a fifty percent reduction
in the third to fifth years. However, the exemption from or reduction of income tax on enterprises with foreign investment engaged
in the exploitation of resources such as petroleum, natural gas, rare metals, and precious metals shall be regulated separately by
the State Council. Enterprises with foreign investment which have actually operated for a period of less than ten years shall repay
the amount of income tax exempted or reduced already.

The relevant regulations, promulgated by the State Council before the entry into force of this Law, which provide preferential treatment
of exemption from or reduction of income tax on enterprises engaged in energy, communications, harbour, wharf and other major projects
of a production nature for a period longer than that specified in the preceding paragraph, or which provide preferential treatment
of exemption from or reduction of income tax on enterprises engaged in major projects of a nonproduction nature, shall remain applicable
after this Law enters into force.

Any enterprise with foreign investment which is engaged in agriculture, forestry or animal husbandry and any other enterprise with
foreign investment which is established in remote underdeveloped areas may, upon approval by the competent department for tax affairs
under the State Council of an application filed by the enterprise, be allowed a fifteen to thirty percent reduction of the amount
of income tax payable for a period of another ten years following the expiration of the period for tax exemption or reduction as
provided for in the preceding two paragraphs.

After this Law enters into force, any modification to the provisions of the preceding three paragraphs of this Article on the exemption
from or reduction of income tax on enterprises shall be submitted by the State Council to the Standing Committee of the National
People’s Congress for decision.

Article 9

The exemption from or reduction of local income tax on any enterprise with foreign investment which operates in an industry or undertakes
a project encouraged by the State shall, in accordance with the actual situation, be at the discretion of the people’s government
of the relevant province, autonomous region or municipality directly under the Central Government.

Article 10

Any foreign investor of an enterprise with foreign investment which reinvests its share of profit obtained from the enterprise directly
into that enterprise by increasing its registered capital, or uses the profit as capital investment to establish other enterprises
with foreign investment to operate for a period of not less than five years shall, upon approval by the tax authorities of an application
filed by the investor, be refunded forty percent of the income tax already paid on the reinvested amount. Where regulations of the
State Council provide otherwise in respect of preferential treatment, such provisions shall apply. If the investor withdraws its
reinvestment before the expiration of a period of five years, it shall repay the refunded tax.

Article 11

Losses incurred in a tax year by any enterprise with foreign investment and by an establishment or a place set up in China by a foreign
enterprise to engage in production or business operations may be made up by the income of the following tax year. Should the income
of the following tax year be insufficient to make up for the said losses, the balance may be made up by its income of the further
subsequent year, and so on, over a period not exceeding five years.

Article 12

Any enterprise with foreign investment shall be allowed, when filing a consolidated income tax return, to deduct from the amount of
tax payable the foreign income tax already paid abroad in respect of the income derived from sources outside China. The deductible
amount shall, however, not exceed the amount of income tax otherwise payable under this Law in respect of the income derived from
sources outside China.

Article 13

The payment or receipt of charges or fees in business transactions between an enterprise with foreign investment or an establishment
or a place set up in China by a foreign enterprise to engage in production or business operations, and its associated enterprises,
shall be made in the same manner as the payment or receipt of charges or fees in business transactions between independent enterprises.
Where the payment or receipt of charges or fees is not made in the same manner as in business transactions between independent enterprises
and results in a reduction of the taxable income, the tax authorities shall have the right to make reasonable adjustment.

Article 14

Where an enterprise with foreign investment or an establishment or a place set up in China by a foreign enterprise to engage in production
or business operations is established, moves to a new site, merges with another enterprise, breaks up, winds up or makes a change
in any of the main entries of registration, it shall present the relevant documents to and go through tax registration or a change
or cancellation in registration with the local tax authorities after the relevant event is registered, or a change or cancellation
in registration is made with the administrative agency for industry and commerce.

Article 15

Income tax on enterprises and local income tax shall be computed on an annual basis and paid in advance in quarterly instalments.
Such payments shall be made within fifteen days from the end of each quarter and the final settlement shall be made within five months
from the end of each tax year. Any excess payment shall be refunded and any deficiency shall be repaid.

Article 16

Any enterprise with foreign investment and any establishment or place set up in China by a foreign enterprise to engage in production
or business operations shall file its quarterly provisional income tax return in respect of advance payments with the local tax authorities
within the period for each advance payment of tax, and it shall file an annual income tax return together with the final accounting
statements within four months from the end of the tax year.

Article 17

Any enterprise with foreign investment and any establishment or place set up in China by a foreign enterprise to engage in production
or business operations shall report its financial and accounting systems to the local tax authorities for reference. All accounting
records must be complete and accurate, with legitimate vouchers as the basis for entries.

If the financial and accounting bases adopted by an enterprise with foreign investment and an establishment or a place set up in China
by a foreign enterprise to engage in production or business operations contradict the relevant regulations on tax of the State Council,
tax payment shall be computed in accordance with the relevant regulations on tax of the State Council.

Article 18

When any enterprise with foreign investment goes into liquidation, and if the balance of its net assets or the balance of its remaining
property after deduction of the enterprise’s undistributed profit, various funds and liquidation expenses exceeds the enterprise’s
paidin capital, the excess portion shall be liquidation income on which income tax shall be paid in accordance with the provisions
of this Law.

Article 19

Any foreign enterprise which has no establishment or place in China but derives profit, interest, rental, royalty and other income
from sources in China, or though it has an establishment or a place in China, the said income is not effectively connected with such
establishment or place, shall pay an income tax of twenty percent on such income.

For the payment of income tax in accordance with the provisions of the preceding paragraph, the income beneficiary shall be the taxpayer
and the payer shall be the withholding agent. The tax shall be withheld from the amount of each payment by the payer. The withholding
agent shall, within five days, turn the amount of taxes withheld on each payment over to the State Treasury and submit a withholding
income tax return to the local tax authorities.

Income tax shall be exempted or reduced on the following income:

(1)

the profit derived by a foreign investor from an enterprise with foreign investment shall be exempted from income tax;

(2)

income from interest on loans made to the Chinese government or Chinese State banks by international financial organizations shall
be exempted from income tax;

(3)

income from interest on loans made at a preferential interest rate to Chinese State banks by foreign banks shall be exempted from
income tax; and

(4)

income tax of the royalty received for the supply of technical know-how in scientific research, exploitation of energy resources,
development of the communications industries, agricultural, forestry and animal husbandry production, and the development of important
technologies may, upon approval by the competent department for tax affairs under the State Council, be levied at the reduced rate
of ten percent. Where the technology supplied is advanced or the terms are preferential, exemption from income tax may be allowed.

Apart from the aforesaid provisions of this Article, if preferential treatment in respect of reduction of or exemption from income
tax on profit, interest, rental, royalty and other income is required, it shall be regulated by the State Council.

Article 20

The tax authorities shall have the right to inspect the financial, accounting and tax affairs of enterprises with foreign investment
and establishments or places set up in China by foreign enterprises to engage in production or business operations, and have the
right to inspect tax withholding of the withholding agent and its payment of the withheld tax into the State Treasury. The entities
and the withholding agents being so inspected must report the facts and provide relevant information. They may not refuse to report
or conceal any facts.

When making an inspection, the tax officials shall produce their identity documents and be responsible for confidentiality.

Article 21

Income tax payable according to this Law shall be computed in terms of Renminbi (RMB). Income in foreign currency shall be converted
into Renminbi according to the exchange rate quoted by the State exchange control authorities for purposes of tax payment.

Article 22

If any taxpayer fails to pay tax within the prescribed time limit, or if the withholding agent fails to turn over the tax withheld
within the prescribed time limit, the tax authorities shall, in addition to setting a new time limit for tax payment, impose a surcharge
for overdue payment, equal to 0.2 percent of the overdue tax for each day in arrears, starting from the first day the payment becomes
overdue.

Article 23

The tax authorities shall set a new time limit for registration or submission of documents and may impose a fine of five thousand
yuan or less on any taxpayer or withholding agent which fails to go through tax registration or make a change or cancellation in
registration with the tax authorities within the prescribed time limit, or fails to submit income tax return, final accounting statements
or withholding income tax return to the tax authorities within the prescribed time limit, or fails to report its financial and accounting
systems to the tax authorities for reference.

Where the tax authorities have set a new time limit for registration or submission of documents, they shall impose a fine of ten thousand
yuan or less on the taxpayer or withholding agent which again fails to meet the time limit for going through registration or making
a change in registration with the tax authorities, or for submitting income tax return, final accounting statements or withholding
income tax return to the tax authorities. Where the circumstances are serious, the legal representative and the person directly responsible
shall be investigated for criminal responsibility by applying mutatis mutandis the provisions of Article 121 of the Criminal Law.

Article 24

Where the withholding agent fails to fulfil its obligation to withhold tax as provided in this Law, and does not withhold or withholds
an amount less than that should have been withheld, the tax authorities shall set a time limit for the payment of the amount of tax
that should have been withheld, and may impose a fine up to but not exceeding one hundred percent of the amount of tax that should
have been withheld.

Where the withholding agent fails to turn the tax withheld over to the State Treasury within the prescribed time limit, the tax authorities
shall set a time limit for turning over the taxes and may impose a fine of five thousand yuan or less on the withholding agent; if
the withholding agent fails to meet the time limit again, the tax authorities shall pursue the taxes according to law and may impose
a fine of ten thousand yuan or less on the withholding agent. If the circumstances are serious, the legal representative and the
person directly responsible shall be investigated for criminal responsibility by applying mutatis mutandis the provisions of Article
121 of the Criminal Law.

Article 25

Where any person evades tax by deception or concealment or fails to pay tax within the time limit prescribed by this Law and, after
the tax authorities pursued the payment of tax, fails again to pay it within the prescribed time limit, the tax authorities shall,
in addition to recovering the tax which should have been paid, impose a fine up to but not exceeding five hundred percent of the
amount of tax which should have been paid. Where the circumstances are serious, the legal representative and the person directly
responsible shall be investigated for criminal responsibility in accordance with the provisions of Article 121 of the Criminal Law.

Article 26

Any enterprise with foreign investment, foreign enterprise or withholding agent, in case of a dispute with the tax authorities on
payment of tax, must pay tax according to the relevant regulations first. Thereafter, the taxpayer or withholding agent may, within
sixty days from the date of receipt of the tax payment certificate issued by the tax authorities, apply to the tax authorities at
the next higher level for reconsideration. The higher tax authorities shall make a decision within sixty days after receipt of the
application for reconsideration. If the taxpayer or withholding agent is not satisfied with the decision, it may institute legal
proceedings in the people’s court within fifteen days from the date of receipt of the notification on decision made after reconsideration.

If the party concerned is not satisfied with the decision on punishment by the tax authorities, it may, within fifteen days from the
date of receipt of the notification on punishment, apply for reconsideration to the tax authorities at the next higher level than
that which made the decision on punishment. Where the party is not satisfied with the decision made after reconsideration, it may
institute legal proceedings in the people’s court within fifteen days from the date of receipt of the decision made after reconsideration.
The party concerned may, however, directly institute legal proceedings in the people’s court within fifteen days from the date of
receipt of the notification on punishment. If the party concerned neither applies for reconsideration to the higher tax authorities,
nor institutes legal proceedings in the people’s court within the time limit, nor complies with the decision on punishment, the tax
authorities which made the decision on punishment may apply to the people’s court for compulsory execution.

Article 27

Where any enterprise with foreign investment which was established before the promulgation of this Law would, in accordance with the
provisions of this Law, otherwise be subject to higher tax rates or enjoy less preferential treatment of tax exemption or reduction
than before the entry into force of this Law, in respect to such enterprise, within its approved period of operation, the law and
relevant regulations of the State Council in effect before the entry into force of this Law shall apply. If any such enterprise has
no approved period of operation, the law and relevant regulations of the State Council in effect before the entry into force of this
Law shall apply within the period prescribed by the State Council. Specific measures shall be drawn up by the State Council.

Article 28

Where the provisions of a tax agreement concluded between the government of the People’s Republic of China and a foreign government
are different from the provisions of this Law, the provisions of the agreement shall prevail.

Article 29

Rules for implementation shall be formulated by the State Council in accordance with this Law.

Article 30

This Law shall enter into force on July 1, 1991. The Income Tax Law of the People’s Republic of China on Chinese-foreign Equity Joint
Ventures and the Income Tax Law of the People’s Republic of China on Foreign Enterprises shall be annulled as of the same date.



 
The Standing Committee of the National People’s Congress
1991-04-09

 







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...