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2006

INTERIM PROCEDURES OF SHANGHAI MUNICIPALITY ON THE ADMINISTRATION OF PYRAMID SELLING

Interim Procedures of ShangHai Municipality on the Administration of Pyramid Selling

     Article 1 (Purposes and Basis)

Based on the relevant laws and regulations such as the Fighting Against Unfair Competitions Law of the People’s Republic of China,
the Protection of the Consumer’s Rights and Interests Law of the People’s Republic of China, Product Quality Law of the People’s
Republic of China, the Registration of Enterprise Legal Person Regulations of the People’s Republic of China, and in the light of
actual conditions in Shanghai, the present Procedures are formulated to standardize pyramid selling activities, to prevent illicit
transactions through pyramid selling, to protect the consumer’s lawful rights and interests, and to maintain the order of socialist
market economy.

   Article 2 (Definition of Pyramid Selling)

The pyramid selling mentioned in these Procedures refers to a mode of direct promotion, in which enterprises that have been approved,
according to the law, to engage in pyramid selling (hereinafter referred to as pyramid selling enterprises) and sell goods to customers
by recruiting multi-level pyramid selling individuals (hereinafter referred to as pyramid sellers).

   Article 3 (Scope of Application)

All the enterprises and salespersons who are engaged in pyramid selling activities in Shanghai must comply with the present Procedures.

   Article 4 (Qualifications of Pyramid Selling Enterprises)

The pyramid selling enterprise must have the status of an enterprise legal person and shall submit a written application to the municipal
industrial and commercial administrative organ before it undertakes pyramid selling. It can start operation only after obtaining
approval.

The following documents shall be submitted in applying to conduct pyramid selling:

1. Written application;

2. A copy of the business licence for enterprise legal person;

3. Detailed operating plans or schemes for the pyramid selling, including the date of launching the selling, the varieties, trademarks,
qualities and prices of the commodities to be sold, the requirements and formalities for the pyramid sellers involved, the specimen
agreement to be signed with the pyramid seller, ways of training the pyramid seller, and measures for handling unsold goods and the
matter of remuneration after the termination of the agreement between the pyramid selling enterprise and the pyramid seller, etc.;

4. Other documents required by the municipal industrial and commercial administrative organ.

The municipal industrial and commercial administrative organ shall make a decision on examination and approval within 30 days after
receiving the written application.

   Article 5 (Cessation of Pyramid Selling)

The enterprise that intends to cease its pyramid selling activities shall go through the necessary formalities with the municipal
industrial and commercial administrative organ.

   Article 6 (Qualifications of Pyramid Sellers)

The following individuals who have the registered permanent residence in Shanghai may be recruited as pyramid sellers:

1. The unemployed;

2. The redundant staff pending reassignment in enterprises;

3. The retiree and other individuals not on the job.

The above-mentioned individuals shall undergo the professional training provided by the pyramid selling enterprises and can commence
pyramid selling activities only after obtaining the pyramid seller’s certificates.

No individual is allowed to extend pyramid selling by himself or herself, or to draw other people into such business activities.

The pyramid selling enterprise shall not charge fees for the professional training sponsored by it.

   Article 7 (Information To Be Given to Pyramid Seller)

The pyramid selling enterprise shall give the pyramid sellers true information on the following points:

1. Requirements for becoming a pyramid seller;

2. The status of the enterprise’s operation;

3. Methods to operate the pyramid selling;

4. The qualities, performance, prices and applications of the commodities to be promoted;

5. Ways to deal with disputes arising from pyramid selling;

6. Procedures for withdrawal from the pyramid selling;

7. Procedures for handling returned goods.

   Article 8 (Signing of Agreement)

The pyramid selling enterprise shall sign with the pyramid seller a written agreement, which shall cover Item 3 to 7 in Article 7
of the present Procedures.

   Article 9 (Prohibition)

The pyramid selling enterprise shall not require a pyramid seller candidate to purchase goods or pay earnest money as his or her qualification
for holding the job.

   Article 10 (Collection of Deposit)

The pyramid selling enterprise may collect a deposit from the pyramid seller when it consigns goods to him or her, and settle the
account after the sales. The proportion of deposit shall be decided through consultation between the pyramid selling enterprise and
the pyramid seller, but it shall not exceed 50 per cent of the cost price of the goods.

   Article 11 (Commodities Prohibited from Pyramid Selling)

The pyramid selling enterprise is not allowed to promote the following commodities:

1. Commodities of which the free trading is forbidden or limited by the state;

2. Domestic electrical appliances;

3. Fresh aquatic products, foodstuffs and medicines;

4. Gold, silver, jewelry and diamond ornaments;

5. Other commodities prohibited from pyramid selling promulgated by the municipal industrial and commercial administrative organ.

   Article 12 (Pricing of Commodities for Pyramid Selling)

The commodities for which prices have been set by the state must be priced as set by the state; prices subject to an authoritative
approval must be reported to the department in charge for approval; prices to be fixed by the enterprise itself must not be obviously
higher than the prevailing market prices for commodities of the same category.

   Article 13 (Withdrawal from pyramid Selling)

To withdraw from the pyramid selling activities, the pyramid seller shall inform the pyramid selling enterprise in advance, go through
the withdrawal procedures as prescribed in the agreement and return the seller’s certificate to the enterprise.

The pyramid selling enterprise shall not refuse the unsold goods returned by the pyramid seller nor retain all or part of the latter’s
deposit.

   Article 14 (Compensation for Damages)

If the returned unsold goods are damaged or lost through the fault of the pyramid seller, he or she shall make a reasonable compensation
to the pyramid selling enterprise.

   Article 15 (Responsibility for Sales)

The pyramid selling enterprise shall be responsible for the quality of the goods sold by the pyramid seller, assuming the civil responsibility
for the goods sold, in accordance with the provisions of relevant laws and regulations of the state.

The pyramid seller must present his or her certificate to the consumer in the pyramid selling activities; the consumer has the right
to ask the pyramid seller to show his or her certificate.

   Article 16 (Preservation of Materials)

The pyramid selling enterprise shall keep an accurate record of the status of the pyramid selling and preserve the following materials:

1. Original vouchers for the purchase and sales of goods, account records, bank bills, bills for transportation and storage expenses
and the accounting sheets for the pricing of commodities;

2. Data on the pyramid seller’s professional training and related expenses;

3. The total number of its pyramid seller, their names, identification data, work units and home addresses;

4. The agreement signed with the pyramid seller;

5. Vouchers for remunerations paid to the pyramid seller;

6. Other materials related to the pyramid selling.

All materials listed above shall be kept by the pyramid selling enterprise for at least five years.

   Article 17 (Payment of Taxes According to Laws)

The pyramid selling enterprise must pay taxes in accordance with law.

The pyramid seller’s personal income tax shall be deducted by the pyramid selling enterprise from his or her earnings from the pyramid
selling activities.

   Article 18 (Measures for Dealing with Breaches)

Pyramid selling enterprises that violate the present Procedures may be punished by the industrial and commercial administrative organ
according to the following provisions:

1. Enterprises that are engaged in pyramid selling without governmental approval shall be ordered to cease their pyramid selling activities
and face a confiscation of the illegal earnings with a fine 2 to 5 times as much as the earnings; the business licence for enterprise
legal person shall be revoked in serious cases;

2. Enterprises that conceal or lie about the items stipulated in Section 2 Article 4, constituting illegal pyramid selling, shall
be ordered to cease their selling activities; a confiscation of the illegal earnings and a fine ranging from RMB 2000 to RMB 10,000
shall be imposed according to the seriousness of the case;

3. Enterprises that require a pyramid seller candidate to purchase goods or pay earnest money as his/her qualification for holding
the job, shall be ordered to cease their pyramid selling and to return to the pyramid seller his or her payment for goods or earnest
money; a fine 5 to 10 times as much as the payment for goods or the earnest money shall be imposed according to the seriousness of
the case;

4. Enterprises that conduct pyramid selling involving commodities prohibited by the relevant laws, rules or regulations shall be punished
by confiscation of the illegal earnings with a fine 5 to 10 times as much as the illegal earnings according to the seriousness of
the case;

5. Enterprises that fail to preserve the relevant materials as stipulated in Article 16 of the present Procedures shall be ordered
to rectify the situation within a specific period; a fine ranging from RMB 10,000 to RMB 50,000 coupled with a cessation of the pyramid
selling shall be imposed according to the seriousness of the case.

   Article 19 (Functions of Other Administrative Departments)

Any pyramid selling enterprise that violates the relevant laws, rules or regulations on prices, taxes, qualities or sanitation shall
be dealt with according to the laws, by the price, taxation, technical supervision or health administrative departments within their
respective spheres of functions; serious cases of breaches may be referred to the industrial and commercial administrative organ
with the request that it order the enterprises concerned to cease their pyramid selling.

   Article 20 (Civil Responsibility and Criminal Responsibility)

Disputes arising between the pyramid selling enterprise and the pyramid seller shall be handled in accordance with the provisions
of the civil laws.

If a breach of the present Procedures is serious enough to constitute a crime, the party concerned shall be prosecuted for its criminal
responsibility according to the laws.

   Article 21 (Administrative Reconsideration and Lawsuit)

If the party concerned finds the specific administrative acts unacceptable, it has the right to apply for reconsideration of the case
according to the Provisions in the Regulations on Administrative Reconsideration and the Administrative Procedure Law of the People’s
Republic of China or to take legal proceedings with a people’s court.

   Article 22 (Organ to Interpret the Application of the Present Procedures)

The Shanghai Municipal Industrial and Commercial Administration is vested with the authority to interpret the specific application
of the present Procedures.

   Article 23 (Date of Implementation)

These Procedures shall become effective on the date of promulgation.

    





SUPPLEMENTARY CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE SETTLEMENT FOR THE TAXPAYERS OBTAINING THE FALSE SPECIAL INVOICE OF VALUE-ADDED TAX WITHOUT ACKNOWLEDGEMENT

The State Administration of Taxation

Supplementary Circular of the State Administration of Taxation on the Circular of the State Administration of Taxation on the Settlement
for the Taxpayers Obtaining the False Special Invoice of Value-added Tax without Acknowledgement

GuoShuiFa [2000] No.182

November 6, 2000

The local taxation bureaus and the taxation bureaus of province, autonomous region, municipality directly under the Central Government
and municipality separately listed on the State plan:

In order to implement the Circular of the State Administration of Taxation on the Handling of Drawing the False Added-value Invoice
by the Taxpayers (GuoShuiFa [2000] No.134 , hereinafter referred to No.134 document) strictly and crack down the activity of drawing
the false added-value special invoice and protect the legitimate rights and interests of taxpayers, the relative issues are clarified
as follows now:

If one of the following occurs, it is handled in name of tax dodging and defraud of the exports tax rebate when the buyers apply for
the deducting of receipts tax or exports tax rebate for the tax authority, regardless of whether the real transaction between sellers
and buyers occurs or the amount of goods and money on the added-value tax special invoice conforms to the real transaction.

I.

The name and seal of sellers marked in the added-value special invoice obtained by the buyers do not conform to the sellers of the
real transaction, which belongs to the situation prescribed in article 2 of No.134 document that the buyers obtain the invoice from
the sellers drawn by the 3rd party.

II.

The added-value special invoice obtained by the buyers is not the invoice of province (autonomous region and municipality separately
listed on the State plan) where sellers stay in, which belongs to the situation prescribed in the article 2 of No.134 document that
invoice is obtained from the area out of sales place.

III.

There is other evidence that shows that buyers know the added-value invoice is obtained illegally by the sellers, which is prescribed
in the article 1 of No.134 document that drawee apply the taxation institutions for tax deducting by use of the invoice drawn by
others in purpose of tax dodging.



 
The State Administration of Taxation
2000-11-06

 






CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION, THE NATIONAL BUREAU OF STATISTICS CONCERNING EXAMINATION OF THE STATISTIC WORK FOR FOREIGN CAPITAL UTILIZATION

The Ministry of Foreign Trade and Economic Cooperation, the National Bureau of Statistics

Circular of the Ministry of Foreign Trade and Economic Cooperation, the National Bureau of Statistics Concerning Examination of the
Statistic Work for Foreign Capital Utilization

WaiJingMaoZiFa [2000] No.377

July 18, 2000

Commissions (departments, bureaus) of foreign trade and economic cooperation, bureau of statistics of all provinces, autonomous regions,
municipalities directly under the Central Government and municipalities separately listed on the State plan:

With a view to better implementing the Statistics Law of the People’s Republic of China and the Statistic System for Foreign Capital
Utilization, promoting administration and statistic work by rule of law, and further improving the quality of statistic data for
foreign capital utilization, the Ministry of Foreign Trade and Economic Cooperation and the National Bureau of Statistics will carry
out a thorough examination of the statistic work for foreign capital utilization nationwide. The related issues are hereby notified
as follows:

1.

Scope of examination: statistics divisions of commissions (departments, bureaus) of foreign trade and economic cooperation of all
provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately listed on the State
plan, and statistics authorities in subordinate regions, cities and counties (districts), and enterprises with foreign investment.

2.

Contents of examination:

(1)

the quality of the statistic data for foreign capital utilization. The focus will be on the examination and evaluation of various
periodic financial statements, initial data of collected information and statistic accounts, etc. of the statistics authorities of
subordinate regions, cities and counties (districts) in the year 1999 and the first half of 2000 to see whether these statements
and accounts are consistent with one another.

(2)

statistics institutions for foreign investment and their personnel. The focus will be on the implementing situation of root-level
construction and internal management system, and the position-setting of chiefs and full-time personnel of these institutions.

(3)

professional training conditions of statistic personnel (including the number and range of courses offered and attendance)

3.

Time and steps of examination:

(1)

the phase of self-examination (July 25-August 15). Every local foreign economic and trade commission should, in accordance with the
above-mentioned requirements and contents of the examination, organize self-examinations of the statistic work of its own department
and of the statistics authorities of subordinate regions, cities and counties (districts), faithfully fill out the Self-examination
Form of Statistic Work for Foreign Capital Utilization and the Survey on Statistic Personnel for Foreign Capital Utilization (see
Attachments 1 and 2) and submit a self-examination work summary to the Department of Foreign Investment of the Ministry of Foreign
Trade and Economic Cooperation before August 15.

(2)

the phase of focused examination (August 30-September 20). The Ministry of Foreign Trade and Economic Cooperation and the National
Bureau of Statistics will, in view of the problems both encountered during the course of self-examination, set up a joint examination
group to conduct focused examinations in key areas.

(3)

the phase of summary and rectification (September 20-October 20)

(I) According to examination results of the first two phases, the Ministry of Foreign Trade and Economic Cooperation will summarize
the examinations results of law enforcement in statistic authorities nationwide and commend units and individuals with excellent
performance at statistic work, and publicize the criticism of units that violate the Statistics Law and the Statistic System for
Foreign Capital Utilization or make false or deceptive reports. Serious cases will be filed and investigated by the municipal or
provincial bureau of statistics on the basis of the consultation between the Ministry of Foreign Trade and Economic Cooperation and
the National Bureau of Statistics. The final verdict will be reported to the Ministry of Foreign Trade and Economic Cooperation and
the National Bureau of Statistics. As for cities and provinces with grave distortion of the real statistics, their annual reports
on statistics of foreign capital utilization will be considered invalid, and the related situations shall be reported to the State
Council.

(II)Each local authority of foreign trade and economic cooperation should produce specific rectifying measures in view of the problems
found during the examinations, and report to the Department of Foreign Investment of the Ministry of Foreign Trade and Economic Cooperation
in writing before October 10.

4.

Each local authority of foreign trade and economic cooperation should conduct the examination in a careful manner and designate special
people to be responsible for supervision and coordination during the examination. Competent authorities at various levels should
tighten their guidance of the examination, render support in people, resources and funding, and actively create conditions to make
the examination a success.

That is hereby the notification.

Attachment

1: the Self-examination Form of Statistic Work for Foreign Capital Utilization (omitted)

2: the Survey on Statistic Personnel for Foreign Capital Utilization (omitted)



 
The Ministry of Foreign Trade and Economic Cooperation, the National Bureau of Statistics
2000-07-18

 






INDIVIDUAL PROPRIETORSHIP ENTERPRISES LAW

Law of the People’s Republic of China on Individual Proprietorship Enterprises

(Adopted at the 11th Meeting of the Standing Committee of the Ninth National People’s Congress on August 30, 1999
and promulgated by Order No. 20 of the President of the People’s Republic of China on August 30, 1999) 

Contents 

Chapter I    General Provisions 

Chapter II   Establishment of Individual Proprietorship Enterprises 

Chapter III  Investors and Business Management of Individual Proprietorship Enterprises 

Chapter IV   Dissolution and Liquidation of Individual Proprietorship Enterprises 

Chapter V    Legal Responsibilities 

Chapter VI   Supplementary Provisions 

Chapter I 

General Provisions 

Article 1  This Law is enacted in accordance with the Constitution with a view to regulating activities of individual proprietorship
enterprises, protecting the legitimate rights and interests of investors and creditors of individual proprietorship enterprises,
maintaining the socio-economic order and promoting the development of the socialist market economy in China. 

Article 2  The individual proprietorship enterprise referred to by this Law means a business entity which, in accordance with
this Law, is established within China and invested in by one natural person and the  property of which is personally owned by
the investor who shall assume unlimited liabilities for the debts of the enterprise with his own property. 

Article 3   The domicile of an individual proprietorship enterprise shall be the place where its major business office
is located. 

Article 4 Individual proprietorship enterprises must abide by law and administrative regulations in their business operations, comply
with the principle of honest and good-faith, and may not harm public interests. 

Individual proprietorship enterprises shall fulfill the obligation of tax payment according to law. 

Article 5   The State shall protect the property and other legitimate rights and interests of individual proprietorship
enterprises according to law. 

Article 6 Individual proprietorship enterprises shall employ personnel according to law. The legitimate rights and interests of the
employees of individual proprietorship enterprises shall be protected by law. 

Employees of individual proprietorship enterprises shall establish their trade unions according to law which shall display their
activities according to law. 

Article 7 The members of the Chinese Communist Party among the employees of individual proprietorship enterprises shall conduct their
activities in accordance with the Constitution of the Chinese Communist Party. 

Chapter II 

Establishment of Individual Proprietorship Enterprises 

Article 8  In establishing an individual proprietorship enterprise, the following requirements shall met: 

(1) the investor being one natural person; 

(2) having a legal enterprise name; 

(3) having a capital to contributed by the investor; 

(4) having a fix place for its production and business operation with necessary conditions therefor; and 

(5) having necessary personnel. 

Article 9   In applying for the establishment of an individual proprietorship enterprise, the investor or his entrusted
agent shall submit to the registration authority of the locality where the individual proprietorship enterprise is to be situated
such documents as a formal application for the establishment of the individual proprietorship enterprise, a document certifying the
investor’s status and a document permitting the use of production and business operation. Where the application for the establishment
of an individual proprietorship enterprise is entrusted to an agent, the agent shall produce the power of attorney issued by the
investor and a document certifying his legitimacy as an agent. 

Individual proprietorship enterprises may not engage in any business prohibited by law or administrative regulations. For the establishment
of an individual proprietorship enterprise the business of which is subject to approval by a competent authority according to law
or administrative regulations, the document of approval issued by the competent authority shall be submitted when applying for the
establishment. 

Article 10 The application for the establishment of an individual proprietorship enterprise shall specify the following particulars: 

(1) the name and domicile of the individual proprietorship enterprise; 

(2) the name and domicile of the investor; 

(3) the amount of capital to be contributed by the investor and the mode of capital contributor; and 

(4) the scope of business of the individual proprietorship enterprise. 

Article 11  The name of an individual proprietorship enterprise shall be consistent with the form of its liabilities and the
business it will undertake. 

Article 12   The registration authority shall, within 15 days counted from the date of receiving a written application
for the establishment of an individual proprietorship enterprise, permits the registration where the requirements defined by this
Law are met and grant to the applicant a business license or shall deny the registration where the requirements defined by this Law
are not met and give the applicant a written reply to state the reasons therefor. 

Article 13  The date of issuance of the business licence to an individual proprietorship enterprise shall be the date of its
establishment. 

The investor of an individual proprietorship enterprise may not conduct any business under the name of the enterprise before obtaining
the business license for the enterprise. 

Article 14   Where an individual proprietorship enterprise plans to establish a branch, its investor or his entrusted agent
shall apply for the registration to a competent registration authority in the locality where the branch is to be established, and
shall obtain a business licence for the branch. 

After the establishment of a branch is approved and registered, its registration shall be reported for the record to the original
registration authority of the individual proprietorship enterprise to which the branch is affiliated. 

The civil liabilities of a branch shall be assumed by the individual proprietorship enterprise that has established it. 

Article 15 Where a registered matter of an individual proprietorship enterprise is to be changed in the period of its continued existence,
a registration change shall be applied for to the relevant registration authority according to law within 15 days counted from the
date of decision on the change. 

Chapter  III 

Investors and Business Management of 

Individual Proprietorship Enterprises 

Article 16  Whoever is prohibited by law or administrative regulations from operating profit-making business, may not apply
for the establishment of an individual proprietorship enterprise in the capacity of an investor. 

Article 17  The investor of an individual proprietorship enterprise enjoys the ownership of the property of the enterprise according
to law, and the relevant rights may be transferred or inherited according to law. 

Article 18   The investor of an individual proprietorship enterprise who, while applying for registering the establishment
of the enterprise, clearly indicates that the common property of his family is the capital contributed shall assume unlimited liabilities
for the debts of the enterprise with the common property of his family according to law. 

Article 19  The investor of an individual proprietorship may manage the enterprise business by himself, or may commission or
employ any other person with civil capacity to take charge of the management of the enterprise business. 

Where the investor of an individual proprietorship enterprise commissions or employs another person to manage the enterprise business,
he shall conclude with the person commissioned or employed a written contract to specify the business commissioned and the scope
of authorization. 

The person commissioned or employed shall fulfill the obligation of honesty, good-faith and diligence, and shall manage the business
of the relevant individual proprietorship enterprise in accordance with the contract signed with its investor. 

The restriction put by the investor of an individual proprietorship enterprise on the power of the person commissioned or employed
may not oppose a bona fide party. 

Article 20   Any person commissioned or employed by the investor of an individual proprietorship enterprise to manage the
enterprise business may not commit any of the following acts: 

(1) to seek or take bribes by taking advantage of his position; 

(2) to embezzle enterprise property by taking advantage of his position or work; 

(3) to misappropriate enterprise funds for personal use, or to lend such funds to other persons; 

(4) to open a bank account for depositing enterprise funds in his own name or in any others name without authorization; 

(5) to provide guarantee with enterprise property without authorization; 

(6) to undertake a business that competes with the enterprise without consent of the investor; 

(7) to conclude a contract or to trade with the enterprise itself without consent of the investor; 

(8) to transfer the trademark or other intellectual property rights of the enterprise to others for their use without consent of
the investor; 

(9) to divulge business secret of the enterprise; or 

(10) any other acts prohibited by law or administrative regulations. 

Article 21   Individual proprietorship enterprises shall establish their account books and practice accounting according
to law. 

Article 22   Where individual proprietorship enterprises employ workers, they shall conclude labour contracts with the
workers according to  law, ensure their labour safety, and pay them salaries on time and in full. 

Article 23   Individual proprietorship enterprises shall, in accordance with relevant regulations of the State, participate
in social insurance programs and pay social insurance premiums for their employees. 

Article 24   Individual proprietorship enterprises may apply for loans and obtain the right to use land according to law
and enjoy other rights defined by law and administrative regulations. 

Article 25   No institutions or individuals may force individual proprietorship enterprises to provide financial resources,
material resources or manpower by any means in violation of law or administrative regulations. Individual proprietorship enterprises
have the right to reject any acts meant to force them to provide financial resources, material resources or manpower in violation
of law. 

Chapter IV 

Dissolution and Liquidation of 

Individual Proprietorship Enterprises 

Article 26  An individual proprietorship enterprise shall be dissolved in any of the following circumstances: 

(1) the decision of the investor to dissolve the enterprise; 

(2) the death of the investor or the announcement of his death without an heir or with the decision of his heir to waive the right
to inheritance; 

(3) revocation of its business license according to law; or 

(4) other circumstances as defined by law or administrative regulations. 

Article 27 When an individual proprietorship enterprise is dissolved, its liquidation shall be done either by the investor himself
or by a liquidator designated by a People’s Court at the request of its creditors. 

Where the liquidation is done by he investor himself, he shall notify the creditors in writing 15 days before the liquidation. If
it is impossible to notify the creditors, he shall make a public announcement. The creditors shall declare their claims within 30
days counted from the date of receiving the notification, or within 60 days counted from the date of the public announcement in the
absence of a notification. 

Article 28  After an individual proprietorship enterprise is dissolved, its original investor shall still be liable to pay the
debts of the enterprise incurred during the period of its continued existence. However, where creditors do not claim the refund by
the debtor within a period of five years, such liabilities shall vanish. 

Article 29   After the dissolution of an individual proprietorship enterprise, its property shall be liquidated in the
following order: 

(1) the salaries and the social insurance premiums owed to its employees; 

(2) the taxes due; and 

(3) other debts. 

Article 30  In the period of its liquidation, the individual proprietorship enterprise may not operate any business irrelevant
to the purpose of liquidation. Before its property is liquidated in accordance with the preceding Article, the investor may not transfer
or hide his property. 

Article 31  Where the property of an individual proprietorship enterprise is insufficient for the liquidation, the investor
shall pay off the debts with his other property. 

Article 32  After the liquidation of an individual proprietorship enterprise is ended, the investor or the liquidator designated
by a People’s Court shall work out a liquidation report and have its registration cancelled by registration authority within a period
of 15 days. 

Chapter V 

Legal Responsibilities 

Article 33   In case of a violation of the provisions of this Law by submitting false documents or taking other fraudulent
means to obtain the registration of an individual proprietorship enterprise, due correction shall be ordered, and a fine of not more
than 5,000 yuan shall be imposed; and the business license shall be concurrently revoked if the case is serious. 

Article 34   In case of a violation of the provision of  this Law by giving a name inconsistent with the name registered
at the competent registration authority, a correction shall be ordered within a prescribed period of time, and a fine of not more
than 2,000 yuan shall be imposed. 

Article 35  In case of altering , leasing or transferring the business of an individual proprietorship enterprise, correction
shall be ordered, the illegal gains shall be confiscated, and a fine of not more than 3,000 yuan shall be imposed; and the business
license shall be revoked if the case is serious. 

In case of forgery of a business license, the suspension of the business operation shall be ordered, the illegal gains shall be confiscated,
and a fine of not more than 5,000 yuan shall be imposed ; and criminal responsibility shall be investigated according to law if the
case constitutes a crime. 

Article 36  Where an individual proprietorship enterprise fails to start its business operation over six months following its
establishment without justification, or suspends its business operation by itself over six months after its opening, its business
license shall be revoked. 

Article 37   In case of a violation of the provisions of this Law by operating business in the name of an individual proprietorship
enterprise without obtaining a business license, suspension of the business operation shall be ordered and a fine of not more than
3.000 yuan shall be imposed. 

In case of failure to apply for a registration change about the change in registered matters of an individual proprietorship enterprise,
due registration change within a prescribed period of time shall be ordered; in case of failure to apply for the registration change
within the prescribed period of time, a fine of not more than 2,000 yuan shall be imposed. 

Article 38   Where any person commissioned or employed by an investor to manage his individual proprietorship enterprise
breaks the contract concluded by the two parties causing thus damage to the investor, the person shall assume  the civil liability
for damage. 

Article 39   Any individual proprietorship enterprise that, in violation of the provisions of this Law, infringes upon
legitimate rights and interests of its employees, fails to ensure the labour safety for its employees or fails to pay their social
insurance premiums shall be punished in accordance with the law or the relevant administrative regulations, and the liability therefor
shall be investigated. 

Article 40   When a person commissioned or employed by an investor violates the provisions of Article 20 of this Law, if
the case is embezzlement of enterprises property or infringement of enterprise property rights or interests, the return of the property
embezzled shall be ordered; if the case involves illegal gains, the illegal gains shall be confiscated; and if the case constitutes
a crime, criminal responsibility shall be investigated according to law. 

Article 41   Any violation of law or administrative regulations by individual proprietorship enterprises to provide financial
resources, material resources or manpower shall be punished in accordance with the relevant law or administrative regulations, and
the liability of the persons responsible therefor shall be investigated. 

Article 42   Where an individual proprietorship enterprise and its investor hide or transfer property before or during
the period of liquidation to evade liabilities, the property hidden or transferred shall be retrieved according to law, and punishment
shall be given in accordance with the relevant regulations; if the case constitutes a crime, criminal responsibility shall be investigated
according to law. 

Article 43   When an investor violates the provisions of this Law and thus holds civil liability for damage and has to
pay fines or forfeits as well, if his property is insufficient to cover the payment, or if he has been sentenced to the confiscation
of his property, he shall meet the civil liability for damage first. 

Article 44  Where a registration authority permits the registration of an individual proprietorship enterprise that does not
meet the registration requirements defined by this Law, or denies the registration of an individual proprietorship enterprise that
meets the registration requirements defined by this Law, the person directly responsible therefor shall be given administrative punishment
according to law;  if the case constitutes a crime, criminal responsibility shall be investigated according to law. Article
45  Where the person in charge of a department superior to a registration authority forcibly orders the interested registration
authority to permit the registration of an individual proprietorship enterprise that does not meet the registration requirements
defined by this Law, or forcibly orders it to deny the registration of an individual proprietorship that meets the registration requirements
defined by this Law, or covers up its unlawful registration acts, the person directly responsible therefor shall be given administrative
punishment according to law; and if the case constitutes a crime, criminal responsibility shall be investigated according to law. 

Article 46  Where a registration authority denies the registration of an application that meets the legal requirements or fails
to give a reply beyond the legally prescribed time limit, the party concerned may apply for an administrative reconsideration or
file an administrative lawsuit in accordance with the law. 

Chapter VI 

Supplementary Provisions 

Article 47  This Law shall not apply to the foreign-capital enterprises in China. 

Article 48  This Law shall go into effect as of January 1, 2000.

Notice: All Rights Reserved to the Legislative Affairs Commission of the Standing Committee of the National People’s Congress.






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON SOME ISSUES OF REAL ESTATE TAX OF ENTERPRISES WITH FOREIGN INVESTMENT

The State Administration of Taxation

Circular of the State Administration of Taxation on some Issues of Real Estate Tax of Enterprises with Foreign Investment

GouShuiFa [2000] No.44

March 8, 2000

Some issues arise from collecting the urban real estate tax of the enterprise with foreign investment because of the respective application
of the Interim Regulations on Urban Real Estate Tax and the Interim Regulations of the People’s Republic of China on Real Estate
Tax to enterprises with foreign investment and domestic-funded enterprises.

This is to specify some issues for the convenience of execution:

I.

On the exemption of real estate tax in using aid-raid defensive facilities

In order to encourage enterprises to using aid-raid defensive facilities, tax is presently exempt for houses of aid-raid defensive
facilities used by enterprises with foreign investment for business according to the Circular on Prosecution of the Explanation and
Interim Provisions on some Issues Concerning Real Estate Tax and the Explanation and Interim Provisions on some Issues Concerning
the Using Tax of Vehicles and Vessels (CaiDiShuiZi [1986] No.8 of the Ministry of Finance and the State Administration of Taxation).

II.

On the urban real estate tax of counter leasing

Rent should be given priority as the object of taxation in case of leasing. Rent should be the basis for the computing of real estate
tax when an enterprise with foreign investment leases counters to others and collect rent. When the tax based on rent exceeds that
based on the value of real estate, the former prevails; otherwise, the value of real estate should be the basis.

To promote commodity house development, urban real estate tax is at present immunized for the leasing of temporary counters set up
in the process of developing the commodity house, if no property rights are granted by the real estate administrative department
and they are not reflected in the account of “fixed assets”, but urban real estate tax is due according to concerned regulations
for those temporary counters maintained after the handover into use of the commodity house, whatever the account and property rights.

III.

On the exemption of urban real estate tax for individual foreign buyers

Individual foreign buyers of non-business real estate, including overseas Chinese and HK, Macao and Taiwan citizens, are at present
exempt from urban real estate tax according to Article 5 of the Interim Regulations of the People’s Republic of China on Real Estate
Tax.

IV.

This circular shall enter into force as of January 1, 2000.



 
The State Administration of Taxation
2000-03-08

 






CIRCULAR OF CHINA SECURITIES REGULATORY COMMISSION ON ISSUE CONCERNING THE FUND MANAGEMENT COMPANY SETTING UP AFFILIATED AGENCIES WITHIN THE TERRITORY OF CHINA

The China Securities Regulatory Commission

Circular of China Securities Regulatory Commission on Issue Concerning the Fund Management Company Setting up Affiliated Agencies
within the Territory of China

ZhengJianJiJinZi [2000] No.66

September 27, 2000

Each fund management company:

With a view to tightening the control on fund management company setting up affiliated agencies, hereinafter notify the relating matters
on fund management company setting up affiliated agencies in china, according to the relevant State laws, regulations and policies:

1.

Affiliated agencies of the fund management include branch companies and offices.

Branch company and office are totally affiliated bodies without legal-person status, and their legal responsibilities shall be assumed
by their managerial companies.

2.

It shall be approved by China Securities Regulatory Commission for fund management company to set up affiliated agencies in china.
To set up office in china, the company shall report to China Securities Regulatory Commission for record.

3.

Branch company can deal with the development, sales promotion of the fund product and other operations authorized by the company;
and it shall not go beyond the scope of business; the office shall not carry out any profitable activities.

4.

Branch company and office can’t be set up in jointly-funded or joint investment forms, and can’t be operated in contract or lease
ways.

5.

To apply to set up affiliated agencies, fund management company shall submit following materials to China Securities Regulatory Commission:

(1)

application, including reasons to set up the branch company, the name, location and other information of the company to be established;

(2)

resolution of board of directors;

(3)

the main responsibilities and managerial system of the company to be established;

(4)

the resumes of the backbone and leading official of the company to be established;

(5)

other materials required by China Securities Regulatory Commission.

6.

After application to set up branch company being approved, fund management shall go through the procedures of registration at industrial
and commercial ministry with the document ratified by China Securities Regulatory Commission according to the related regulation.

7.

After the establishment of the office, the fund management company shall report the location, responsibilities, managerial system,
name list of leading official and other information of the office to China Securities Regulatory Commission for records in 15 working
date.

8.

To dissolve the branch company or alter the registration matters of the branch company, fund management company shall go through the
procedures at industrious and commercial ministration and report to China Securities Regulatory Commission for records according
to relating regulations.

9.

Fund management company shall establish effective managerial system in order to tighten the control on branch company and office.

10.

China Securities Regulatory Commission will check branch company and office of the fund management company regularly or irregularly,
and the result of check will be an important part of the annual inspection of the fund management company.



 
The China Securities Regulatory Commission
2000-09-27

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON PRINTING AND DISTRIBUTING THE MEASURES CONCERNING BUSINESS INCOME TAX CREDIT ON THE INVESTMENT OF ENTERPRISES WITH FOREIGN INVESTMENT AND FOREIGN ENTERPRISES BY WAY OF PURCHASING HOMEMADE EQUIPMENT

The State Administration of Taxation

Circular of the State Administration of Taxation on Printing and Distributing the Measures Concerning Business Income Tax Credit on
the Investment of Enterprises with Foreign Investment and Foreign Enterprises by Way of Purchasing Homemade Equipment

GuoShuiFa [2000]No.90

May 18,2000

In order to implement the policy of the income tax credit on the investment of enterprises with foreign investment and foreign enterprises
by way of purchasing homemade products, and to enhance the regulation and examination in this regard, the State Administration of
Taxation has formulated the following Measures Concerning Business Income Tax Credit on the Investment of Enterprises with Foreign
Investment and Foreign Enterprises by way of Purchasing Homemade Products in accordance with the Circular on Several Issues on the
Business Income Tax Credit on the Investment of Enterprises with Foreign Investment and Foreign Enterprises by Way of Purchasing
Homemade Products jointly promulgated by the Ministry of Finance and the State Administration of Taxation. You are requested to abide
by the following measures, and should there be any questions arising from practice, please inform the State Administration of Taxation.
Attachment:Measures Concerning Business Income Tax Credit on the Investment of Enterprises with Foreign Investment and Foreign Enterprises by
Way of Purchasing Homemade Products

Article 1

In order to implement the policy on the business income tax credit on the investment of enterprises with foreign investment and foreign
enterprises by way of purchasing homemade products, and to enhance the regulation and examination in this regard, these Measures
have been formulated in accordance with the Income Tax law of the People’s Republic of China on Enterprises with Foreign Investment
and Foreign Enterprises and the Rules for Implementation thereof as well as the Circular on Some Issues on the Business Income Tax
Credit on the Investment of Enterprises with Foreign Investment and Foreign Enterprises by Way of Purchasing Homemade Products (CaiShuiZi
[2000] No. 49, hereinafter referred to as the Circular).

Article 2

These measures apply to enterprises that pay income tax by way of collection upon verification.

Article 3

The equipment in the Circular refers to machines, transportation vehicles, appliances, and tools which fall within the scope stipulated
in the Circular and which are maintained as fixed assets for production or business purposes (including testing and verification
for production). Tools and appliances which are not maintained as fixed assets are excluded.

Article 4

The domestically-made equipment in the Circular refers to any domestically-made equipment which has not been previously used and which
was purchased using currency after July 1, 1999. Equipment invested as part of the registered capital is excluded.

Article 5

The investment made with domestically-made equipment in the Circular refers to the invoice price plus tax for the purchase of the
equipment, not including the VAT refunded in accordance with relative provisions or the fees for the transportation, installment,
and testing of the equipment.

The purchase date shall be the date of the invoice. In case of payment by installment or on credit, the purchase date shall be the
date of arrival of the equipment.

Article 6

Enterprises requesting income tax credit by purchasing domestically-made equipment shall submit an application to the competent tax
authority which shall in turn report to the provincial tax authority for approval.

Article 7

The annual income tax credit shall be used by the Enterprise in accordance with the limitation and the time limit stipulated in the
Circular. In case that the Enterprise was loss making or in the stipulated tax holidays in the previous year before the purchase
of the domestically-made equipment, its income tax for the previous year before the purchase shall be zero and be regarded as the
basis to calculate its increased income tax.

Article 8

In case that the enterprise was loss making in the previous years running before the purchase of the domestically-made equipment,
the income tax credit shall be decided only after the taxable income in the current or following years of the purchase is used to
compensate its losses in the previous years. In case that the enterprise is in the stipulated tax holidays in the current or following
years of the purchase, its taxable income in the current or following year shall be first exempted from income tax and the income
tax credit as a result of purchase of the equipment shall be carried forward to the next year within the time limit stipulated in
the Circular.

Article 9

The additional taxable income decided after inspection by the tax authority shall be added to the taxable income of that year if it
arose in the years before the purchase. It shall not be regarded as tax-credible income if it arises in the current or following
years of the purchase.

Article 10

Enterprises requesting tax credit shall submit their applications to the competent tax authority within two(2) months after the purchase
of the domestically-made equipment. The competent tax authority shall report the applications to the provincial tax authority that
shall examine and approve or disapprove the applications within one(1) month upon receiving the applications. The enterprise shall
receive a copy of the approval document.

When filing the application, the taxpayer shall provide the following documents:

1.

application form of tax credit arising from purchase of domestically-made equipment by enterprises with foreign investment or foreign
enterprises (See attachment 1).

2.

copy of its business license.

3.

copy of its tax registration certificate.

4.

copy of approval of the project granted by MOFTEC or COFTEC.

5.

copy of the contract for the establishment of the enterprise.

6.

copies of the purchasing contract of the domestically-made equipment and the invoice.

7.

copy of the Tax Payment Document (for exportation).

8.

any other documents requested by the tax authority.

Article 11

When submitting the annual income declaration form and its final accounts to the competent tax authority within four (4) months after
each tax year, the enterprise shall note in the declaration form the tax credit it has applied for in the year, together with the
General Form for Approval of Income Tax Credit Arising from Purchase of Domestically-made equipment by Enterprises with Foreign Investment
and Foreign Enterprises (See attachment 2), and the Detailed form of Income Tax Credit Arising from Purchase of Domestically-made
equipment by Enterprises with Foreign Investment and Foreign Enterprises (See attachment 3).

Article 12

The competent tax authority, upon receiving applications and documents submitted by enterprises, shall carefully examine the items
and numbers in the documents and calculate the tax credit and collect income tax.

Article 13

The competent tax authority shall enhance the administration of income tax credit arising from the purchase of domestically-made equipment
by enterprises. It shall keep separate files and account books on income tax credit for each applicant, and keep detailed records
of the creditable income tax, investment already receiving tax credit and not receiving tax credit.

Article 14

The request of income tax credit arising from purchase of domestically-made equipment by the branch offices of the enterprises with
foreign investment in China shall be filed by the enterprise at the place where its main office is located.

Article 15

These Measures shall enter into force on July 1, 1999. Enterprises with foreign investment or foreign enterprises shall before the
end of June 2000 declare to the competent tax authority their purchases of domestically-made equipment executed between July 1, 1999
and December 31, 1999. And the tax authorities at various levels shall examine and approve the applications in accordance with the
above-mentioned provisions and refund the concerned tax before the end of September 2000.

Article 16

Tax authorities of the provinces, autonomous regions, cities under direct control of the Central Government, and municipalities separately
listed on the State plan by the Central government may formulate detailed implementation rules of these Measures, which shall be
filed at the State Administration of Taxation.

Attachments 1:Application Form of Tax Credit Arising from Purchase of Domestically-made Equipment by Enterprises with Foreign Investment
or Foreign Enterprises (Omitted).

Attachments 2:General Form for Approval of Income Tax Credit Arising from Purchase of Domestically-made equipment by Enterprises with
Foreign Investment and Foreign Enterprises (Omitted).

Attachments 3:Detailed form of Income Tax Credit Arising from Purchase of Domestically-made equipment by Enterprises with Foreign
Investment and Foreign Enterprises (Omitted)



 
The State Administration of Taxation
2000-05-18

 






OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ON HOW TO DEAL WITH THE TAXATION OF BUILDING DECORATION EXPENSES OF ENTERPRISES WITH FOREIGN INVESTMENT

The State Administration of Taxation

Official Reply of the State Administration of Taxation on How to Deal with the Taxation of Building Decoration Expenses of Enterprises
with Foreign Investment

September 14, 2000

The State Taxation Bureau of Tianjin:

Your Request for Instructions concerning the Amortizing Period of the Dining-hall Decoration Expenses of the Tianjin Kentucky Limited
Company (JinGuoShuiWai [2000] No. 59) has been received. As how to deal with the taxation of the decoration expenses of enterprises,
we reply after consideration as follows:

1.

With regard to the building decoration expenses of enterprises with foreign investment and foreign enterprises, if the property rights
of the buildings belong to the enterprises themselves, the building decoration expenses, which occurred before the utilization of
the buildings, shall be included in the prices of the buildings, and be calculated for depreciation in accordance with the provision
of the Tax Law concerning the depreciation years of fixed assets. The building decoration expenses, which occurred after the utilization
of the buildings, shall be averagely amortized within five years starting from the following month after the utilization of the buildings
after their re-fitments.

2.

If the property rights of the buildings of the enterprises with foreign investment and foreign enterprises do not belong to the enterprises
themselves, the building decoration expenses shall be averagely amortized within five years starting from the following day after
the utilization of the buildings after their decoration.



 
The State Administration of Taxation
2000-09-14

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION CONCERNING WITHHOLDING OF BUSINESS TAX WITH REGARD TO PRICE FOR SOFTWARE PAID BY CHINESE ENTERPRISES TO FOREIGN ENTERPRISES

The State Administration of Taxation

Circular of the State Administration of Taxation Concerning Withholding of Business Tax with Regard to Price for Software Paid by
Chinese Enterprises to Foreign Enterprises

GuoShuiFa [2000] No.179

November 3, 2000

The Administration of State Taxation and the Administration of Local Taxation of every province, autonomous region, municipality directly
under the Central Government and municipality separately listed on the State plan:

From recent reports by some localities, it has been contentious that whether the price for software paid by Chinese enterprises to
foreign enterprises without any establishment in China is subject to withholding of business tax. With a view to standardizing the
taxation control, the following provisions are made for clarification of the above-mentioned problem.

1.

Where a foreign enterprise sells to a Chinese enterprise mere software or related software together with the transfer of postal or
telecommunication equipment or computers, the price for such software paid by the Chinese transferee is not subject to withholding
of business tax on the foreign enterprise, regardless of whether the customs duty and import link value added tax have been paid
for the imported software.

2.

Where a foreign enterprise rents to a Chinese enterprise postal or telecommunication equipment or computers and software relating
to them, and the Chinese enterprise is charged for the software separately, such charges shall be regarded as rental receipts from
renting the above-mentioned goods and, according to provisions of Circular of the State Administration of Taxation Regarding the
Problem of Whether the Interests and Rental Receipts Earned in China by Foreign Enterprises Are Subject to Business Tax’, be exempt
from business tax.

3.

This Circular shall become effective as of October 1, 1999. No tax payment or refund is to be conducted with regard to the above-mentioned
software imported before October 1, 1999 (reference made to the declaration date) for self use, regardless of whether the tax has
been or has not been paid; business tax paid after October 1, 1999 with regard to price for software paid by the Chinese enterprise
to the foreign enterprise shall be refunded.



 
The State Administration of Taxation
2000-11-03

 






CIRCULAR OF THE MINISTRY OF FINANCE CONCERNING PRINTING AND DISTRIBUTING THE PROVISIONS ON THE ACCOUNTING OF DRAWBACKS FOR PURCHASING HOMEMADE EQUIPMENT AND OF DONATIONS RECEIVED BY ENTERPRISES WITH FOREIGN INVESTMENT

The Ministry of Finance

Circular of the Ministry of Finance Concerning Printing and Distributing the Provisions on the Accounting of Drawbacks for Purchasing
Homemade Equipment and of Donations Received by Enterprises with Foreign Investment

CaiKuai [2000] No.5

July 18,2000

Relevant ministries and committees under the State Council, financial departments or bureaus in all provinces, autonomous regions,
municipalities directly under the Central Government and municipalities separately listed on the State plan, Xinjiang Production
and Construction Corps:

The Provisions on the Accounting of Drawbacks for Purchasing Homemade Equipment and of Donations received by Enterprises with Foreign
Investment is hereby disseminated to you, and you are required to implement them in practice. Please contact us in time if have any
problem in implementation. Attachment:Provisions on the Accounting of Drawbacks for Purchasing Homemade Equipment and of Donations Received by Enterprises with Foreign
Investment

Based on the Circular of State Administration of Taxation Concerning Disseminating the Provisional Measures for Regulating the Drawbacks
of Enterprises with Foreign Investment for Purchasing Homemade Equipments (GuoShuiFa [1999] No.171) and the Circular of the State
Administration of Taxation Concerning the Taxation on Donations received by Enterprises with Foreign Investment and Foreign Enterprises
(GuoShuiFa [1999] No.195), the provisions on the accounting of drawbacks for purchasing homemade equipment and donations received
by enterprises with foreign investment and foreign enterprises are as follows:

1.

The drawback of VAT refunded by taxation authorities for an enterprise with foreign investment purchasing homemade equipment shall
be treated differently :

(1)

If the purchased homemade equipment hasn’t been put into use, the said drawback shall be used to write off the cost of the equipments,
the amount of drawback shall be debited to the account of Cash in Bank and credited to the Account of Project Under Construction.

(2)

If the purchased homemade equipment has been put into use, the original book value and accrued depreciation of the equipment shall
be adjusted correspondingly and the account of Cash in Bank is debited and the account of Fixed Assets is credited for the adjustment
amount. At the same time, the overdrawn depreciation shall be written off and the amount hereof shall be debited to the account of
Accumulated Depreciation and credited to the account such as Manufacturing Expense or Management Expense.

If the drawback of VAT is refunded by taxation authorities during a split year for the purchased homemade equipment which has been
put into use, the original book value and accumulated depreciation of the equipment shall be adjusted correspondingly and the account
of Cash in Bank shall be debited and the account of Fixed Assets shall be credited for the adjusted amount. At the same time, the
overdrawn depreciation shall be written off; the amount shall be debited to the account of Accumulated Depreciation and credited
to the account of Adjustment of Profit and Loss In Previous Year.

The drawback of VAT received by an enterprise before the issuance of the these Provisions, if not treated as the said measures, shall
be adjusted retroactively based on the accounting measures hereof.

2.

Donated assets received by an enterprise with foreign investment shall be treated differently :

(1)

As regards monetary donations received by an enterprise, the actually received amount shall be debited to such account as Cash in
Bank; the income tax payable calculated on the value of monetary donations at current income tax rate shall be credited to the account
of Tax Payable-Income Tax Payable; the value of such assets after income tax payable shall be credited to the account of Capital
Accumulation Fund; at the end of the fiscal year, the balance between the income tax payable calculated according to the value of
monetary donations and the actual income tax payable on the basis of the settlement of the enterprise at the end of the year shall
be debited to the account of Tax Payable-Income Tax Payable and credited to the account of Capital Accumulation Fund.

(2)

As for monetary donations received by an enterprise, an account of 2203 Donated Assets Value Pending Transfer shall be established
for the accounting of the donated assets value pending transfer.

a.

As for non-monetary donations received by an enterprise, the value and relevant costs calculated at market price of similar assets
or according to relevant vouchers be debited to such accounts as Fixed Assets, Intangible Assets, Raw Material, and shall be credited
to such accounts as Donated Assets Value Pending Transfer and Cash In Bank.

b.

At the end of a fiscal year, the book balance of Donated Assets Value Pending Transfer shall be debited to the account of Donated
Assets Value Pending Transfer; income tax payable for donated nonmonetary assets (or income tax payable for such assets after any
loss covered, the same for the following), shall be credited to the account of Tax Payable-Income Tax Payable; and the value of donated
nonmonetary assets after income tax payable shall be credited to the account of Capital Accumulation Fund.

c.

If the non-monetary assets donation remains a certain large number amount after any loss covered, and if it may be, upon approval,
averagely counted in taxable income of the enterprise within 5 years, the value transferred in the amount of taxable income shall
be debited to the account of Donated Assets Value Pending Transfer; the current income tax payable shall be credited to the account
of Tax Payable-Income Tax Payable; the value transferred in taxable income after the current income tax payable, shall be credited
to the account of Capital Accumulation Fund.

3.

If any regulation previously issued is not conformity with the said Provisions, the latter shall prevail.



 
The Ministry of Finance
2000-07-18

 






1...456...10Page 5 of 10

CONSTITUTION ACT, 1982 – page 22

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

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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