Federal Acts

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ABOUT MATTERS REGARDING THE PAYMENT OF ENTERPRISE INCOME TAX BY FOREIGN-INVESTED ENTERPRISES CONDUCTING COMMUNICATIONS SERVICES

Circular of the State Administration of Taxation about Matters Regarding the Payment of Enterprise Income Tax by Foreign-invested
Enterprises Conducting Communications Services

Guo Shui Han [2007] No. 610

The state taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically
designated in the state plan, the local taxation bureaus of Guangdong Province, Hainan Province and Shenzhen Municipality:

The related matters regarding the payment of enterprise income tax by foreign-invested enterprises conducting communication services
are notified as follows subject to the related provisions of the Detailed Rules for the Implementation of the Income Tax Law of the
People’s Republic of China for Foreign-invested Enterprises and Foreign Enterprises (hereinafter referred to as Detailed Rules):

1.

Depreciation life of some fixed assets

(1)

Issues concerning the depreciation of pylons, pipelines, simple houses, mobile houses and other fixed assets. The comprehensive communication
pylons that are used by communications enterprises for receiving and sending signals, the pipelines that are used for storing communications
optical cable facilities and the simple houses that are used for storing the facilities of communications stations, as well as other
fixed assets, etc are absolute component parts of the communications equipments, and shall be uniformly included into the scope of
fixed assets of the communications equipments, the depreciation of which shall be calculated based on the period of 10 years in accordance
with the provisions in Article 35 of the Detailed Rules.

(2)

Issues concerning the depreciation life of communications equipments and computer system equipments. Due to equipment renewal, replacement,
upgrading and transformation and other reasons, a communications enterprise may change the 7-year depreciation life of 2G communications
equipments and computer system equipments of supporting net into 5 years, the shortest as prescribed in Article 35 of the Detailed
Rules according to the equipment renewal condition. In the remaining years after the adjustment, depreciation shall be calculated
on the basis of the book balance of each fixed asset by the straight-line method. The aforesaid adjustment shall be reported to the
competent taxation authorities for archival filing.

2.

Deduction of personnel cost

When prepaying the enterprise income tax of each season, any communications enterprise that implements the management mode of pegging
labor cost to performance evaluation with respect to personnel cost (including wages and welfare expenses, etc.) may temporarily
list the planned amount of personnel cost as the actual personnel cost in accordance with the principle of accounting on the accrual
basis as prescribed in Article 11 of the Detailed Rules,. When making annual declaration of enterprise income tax, it shall adjust
this amount on the basis of the amount actually occurred.

3.

Deduction of expenses for plan of accumulated points

Communications enterprises will develop the plan of accumulated points to reward the clients, which contains giving accumulated points
to clients with certain consuming capacity and rewarding them real objects or services in light of the accumulated points. The expenses
incurred to the real objects or services rewarded to clients may be listed under the cost of the current period by communications
enterprises, while those spent for other purposes may not be listed under the cost.

4.

Accounting unit of entertainment expenses

The entertainment expenses of each branch of a communications enterprise shall be calculated on the basis of branch unit independently.
When paying enterprise income tax on a consolidated basis, a communications enterprise shall calculate the amount concerning the
entertainment expenses actually incurred by the enterprise as a whole (including those incurred by the head office) on a consolidated
basis in light of the proportion as prescribed in Article 22 of the Detailed Rules for the Implementation of the Tax Law.

The present Circular shall enter into force as of the tax year of 2006.

State Administration of Taxation

May 30, 2007



 
State Administration of Taxation
2007-05-30

 







INTERPRETATION OF THE SUPREME PEOPLE’S COURT ON SEVERAL MATTERS CONCERNING THE APPLICATION OF LAW IN THE TRIAL OF CASES INVOLVING THE DISPUTES OVER INFRINGEMENT UPON THE RIGHTS OF NEW PLANT VARIETIES

Announcement of the Supreme People’s Court

Fa Shi [2007] No. 1

The Interpretation of the Supreme People’s Court on Several Matters Concerning the Application of Law in the Trial of Cases Involving
the Disputes over Infringement upon the Rights of New Plant Varieties, has been adopted at the 1411th meeting of the Judicial Committee
of the Supreme People’s Court on December 25, 2006 It is hereby promulgated and shall be implemented as of February 1, 2007.
The Supreme People’s Court

January 12, 2007

Interpretation of the Supreme People’s Court on Several Matters Concerning the Application of Law in the Trial of Cases Involving
the Disputes over Infringement upon the Rights of New Plant Varieties

(Adopted at the 1411th meeting of the Judicial Committee of the Supreme People’s Court on December 25, 2006)

For the purpose of correctly hearing the cases involving the disputes over infringement upon the rights of new plant varieties, and
in accordance with the General Principles of the Civil Law of the People’s Republic of China and the Civil Procedure Law of the People’s
Republic of China, several issues concerning the specific application of law are prescribed as follows in combination with the trial
experiences and actual circumstances on the cases involving the disputes over infringement upon the rights of new plant varieties:

Article 1

In case of any infringement upon the rights to new plant varieties as regarded by the owner of rights to new plant varieties (hereinafter
referred to as the owner of varieties) or interested person , he may raise an action to the people’s court.

Interested person as referred to in the preceding Paragraph comprises the licensee of the license contract on implementing new plant
varieties and the lawful heir of property rights to varieties, etc..

The licensee of an exclusive licensing contract may raise an action to the people’s court independently. The licensee of a sole licensing
contract may, jointly with the owner of the variety, raise an action, or may raise an action independently if the said owner may
not do so. And the licensee of a common licensing contract may raise an action upon explicit authorization of the owner of the variety.

Article 2

Where the propagation materials of an authorized variety are produced or sold for commercial purpose, or are repeatedly used for
producing the propagation materials of another variety for commercial purpose without the permission of the owner of the variety,
the people’s court shall ascertain the infringement upon the rights to new plant varieties.

Where the feature or characteristic of the infringing variety as charged is identical with that of an authorized variety, or the difference
of feature or characteristic between the said two varieties are generated not by genetic variation, the people’s court shall ascertain
in general that the infringing variety as charged falls into the propagation materials of the authorized variety produced or sold
for commercial purpose.

If the infringer repeatedly uses the propagation materials of an authorized variety as the parents for separate propagation with other
parents, the people’s court shall generally ascertain that the propagation materials of the authorized variety are repeatedly used
for producing the propagation materials of another variety for commercial purpose.

Article 3

As for a specific issue that is involved in a case of dispute over the rights to new plant varieties requiring for appraisal, it
shall be appraised by a qualified appraisal institution and appraisers as affirmed upon negotiations by both parties concerned. If
the negotiations fail, the people’s court shall appoint a qualified appraisal institution and appraisers for performing the appraisal.

In case of no appraisal institution or appraisers as prescribed in the preceding Paragraph, it shall be appraised by a professional
institution and professionals with a variety detection technical level accordingly.

Article 4

As for the specific issues that are involved in the cases of disputes over the rights to new plant varieties, the appraisals shall
be performed by way of field observation and measurement and genetic fingerprint detection, or other related methods.

As for the appraisal conclusions made by the methods as prescribed in the preceding Paragraph, the people’s court shall cross-examine
for affirming the weight of proof thereof.

Article 5

When the owner of a variety or interested person raises an action to the people’s court for the infringement upon the rights to new
plant varieties, if he require for stopping the infringement upon the rights to new plant varieties in advance or the evidence preservation
at the same time, the people’s court may make a decision previously upon examination.

The people’s court may, in accordance with the specific circumstances on the case, invite related professional technicians to assist
in the evidence collection under technical procedures accordingly when taking the measures for evidence preservation,.

Article 6

When the people’s court hears the cases of disputes over the infringement upon the rights to new plant varieties, it shall order
the infringer to stop the infringement, make compensation for the losses or bear other civil liabilities in accordance with Article
134 of the General Principles of the Civil Law and in combination with the specific conditions of the cases.

The people’s court may determine the damages in light of the losses of the infringee due to the infringement or the interests of the
infringer from the infringement upon request of the infringee. In case the infringee requires to decide the damages according to
the licensing fee for implementing the new plant variety, the damages may be determined reasonably by the people’s court subject
to the type, time and scope, etc. for the licensing use of the new plant variety and with reference to the fee for licensing use
of the new plant variety.

In case it is difficult to determine the damages in accordance with the preceding paragraph, the damages may be determined by the
people’s court under RMB 500,000 yuan with comprehensive consideration in terms of the nature, duration, and influences of the infringement,
the amount for licensing use of the new plant variety, the type, time, and scope for licensing use of the new plant variety, and
the proper expenses paid by the infringee for investigating and stopping the infringement.

Article 7

Where both the infringee and the infringer agree to make the infringing objects into the money and use it for compensating for the
losses suffered by the infringee, the people’s court shall permit it. Where either the infringee or the infringer does not agree
with the said deduction, the people’s court shall order the infringer to eliminate the activity of the infringing goods and make
them unable to be the propagation materials upon request of the related person.

In case the infringing goods are in the stage of growth or the destruction of the infringing goods will lead to major unfavorable
influences, the method of ordering the destruction of the infringing goods may not be adopted by the people’s court, unless it is
otherwise prescribed by the laws or administrative regulations.

Article 8

Where any individual or rural household for contracted management that engages in agriculture, or forestry, crop farming accepts
the entrustment of someone else for reproducing the propagation materials that infringe upon the rights to varieties, and does not
know that the goods entrusted for propagation are the propagation materials infringing upon the rights to varieties, and has made
out the trustor, the liability of compensation may not be born.



 
The Supreme People’s Court
2007-01-12

 







REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON THE ADMINISTRATION OF THE EXPORT OF DUAL-USE (MILITARY & CIVIL) NUCLEAR FACILITIES AND RELATED TECHNOLOGIES

Regulations of the People’s Republic of China on the Administration of the Export of Dual-use (Military & Civil) Nuclear Facilities
and Related Technologies

(Promulgated by Order No. 245 of the State Council of the People’s Republic of China on June 10, 1998 and revised in accordance with
the Decision of the State Council of the People’s Republic of China on Revising the Regulations of the People’s Republic of China
on the Administration of the Export of Dual-use (Military & Civil) Nuclear Facilities and Related Technologies on January 26,
2007)

Article 1

The present Regulations have been formulated for the purpose of strengthening the administration and control over the export of nuclear
facilities that can be used for both military and civil purposes and the related technologies (hereinafter referred to as the dual-use
nuclear facilities and related technologies) so as to prevent the proliferation of nuclear weapons, guard against nuclear terrorist
activities, promote international cooperation on the peaceful utilization of nuclear energy, and to safeguard the national security
and social benefits.

Article 2

The export of dual-use nuclear facilities and related technologies stipulated in the regulations refers to the export of the equipment,
materials, software, and related technologies listed in A Detailed List of Dual-use Nuclear Facilities and Related Technologies Restricted
for Export (hereinafter referred to as the Restriction List for short), as well as the granting, exhibiting, technological cooperation,
foreign aiding, service and other transformation in alternative ways.

Article 3

The State shall enforce strict administration and control over the export of dual-use nuclear facilities and related technologies,
strictly abides by its due international obligation of nuclear non-proliferation, and prevent the use of dual-use nuclear facilities
and related technologies for the purposes of nuclear explosions and nuclear terrorist activities.

In order to maintain national security and international peace and security, the State may take any measures that are necessary against
the export of dual-use nuclear facilities and related technologies.

Article 4

The export of dual-use nuclear facilities and related technologies should abide by relevant laws, administrative regulations as well
as provisions of the present Regulations, should not jeopardize the national security and social and public interests of China.

Article 5

The State shall implement a licensing system for the export of dual-use nuclear facilities and related technologies.

Article 6

The license for the export of dual-use nuclear facilities and related technologies shall be based on the following promises on the
part of the recipient party:

(1)

The recipient party shall promise that it shall not use the dual-use nuclear facilities and related technologies or any of their duplicates
supplied by China for the purposes of nuclear explosions and other purposes other than the final purposes as is stated by it;

(2)

The recipient party shall promise that it shall not use the dual-use nuclear facilities and related technologies or any of their duplicates
supplied by China in nuclear fuel cycle activities that have not accepted safety inspections by the International Atomic Energy
Agency. This Item shall not apply to those countries that have signed voluntary guarantee agreement with the International Atomic
Energy Agency; and

(3)

The recipient party shall promise that it shall not transfer the dual-use nuclear facilities and related technologies or any of their
duplicates supplied by China to a third party other than the final user as is stated by it without the Chinese government’s consent.

Article 7

Operators engaged in the export of dual-use nuclear facilities and related technologies shall register with the Ministry of Commerce
(MOFCOM). No unit or individual shall be allowed to engage in the export of dual-use nuclear facilities and related technologies
unless registered with the Ministry of Commerce (MOFCOM). The detailed registration procedures shall be worked out by the MOFCOM.

Article 8

Exporters of the dual-use nuclear facilities and related technologies that are listed in the Restriction List shall apply to the
MOFCOM and fill in the Applications Form of Exporting Dual-use Nuclear Facilities and Related Technologies (hereinafter referred
to as the “Export Application Form”), and submit the following documents:

(1)

The identity certificates of the legal representatives of the applicant, principal operators of the business, and the person who handles
the application;

(2)

Duplicates of the contract or agreement;

(3)

The technological illustration or test report of the dual-use nuclear facilities and related technologies;

(4)

The certificates certifying the identity of the final users as well as the final use;

(5)

The guarantee documents required by Article 6 of the present Regulations; and

(6)

Other documents required by MOFCOM.

Article 9

Where the exported dual-use nuclear facilities and related technologies are for exhibition outside China, exclusively used by Chinese
institutions outside China or overhaul outside China which shall be transported back within the stipulated period, or those are for
overhaul within China that shall be transported back outside China, or other circumstances as stipulated by the MOFCOM, the exporter
may, upon examination and approval by the MOFCOM, be exempted from furnishing the documents provided in Article 8 of the present
Regulations.

Article 10

The applicant shall fill in the Export Application Form in accordance with the facts. The Export Application Form shall be designed
and printed uniformly by the MOFCOM.

Article 11

The MOFCOM shall, upon the first day it receives the application form and documents required by Article 8 of the present Regulations,
examine them together with the State Atomic Energy Agency, or with the related competent authorities of the State Council, or with
the Ministry of Foreign Affairs should foreign policies be involved and decide on approval or disapproval within 45 working days.

Article 12

Where the exported dual-use nuclear facilities and related technologies should have great influence on China’s national security,
social and public interests, and foreign policies, the MOFCOM shall, together with related competent authorities, submit it to the
State Council for approval.

Those submitted to the State Council for approval shall be exempt from the limitation of the time limit as provided in Article 11
of the present Regulations.

Article 13

Where the application for the export of dual-use nuclear facilities and related technologies is approved, then MOFCOM shall grant
the license for the export of dual-use nuclear facilities and related technologies (hereinafter referred to as Export License) to
the exporter.

Article 14

Where a holder of the export license changes the exported dual-use nuclear facilities and related technologies, the original export
license shall be submitted for the application of a new license in line with the stipulations of the present Regulations.

Article 15

When exporting dual-use nuclear facilities and related technologies, the exporter shall present the export license to the Customs,
deal with the Customs formalities in accordance with the provisions of the Customs Law and accept the inspection and examination
of the Customs.

Article 16

The Customs may put forward doubts about whether the equipment, materials, software, and related technologies to be exported by the
operator need processing the export license for dual-use nuclear facilities and related technologies, and may require him to apply
to the MOFCOM to process the certifying documents to determine whether his export belongs to the restriction scope of the export
of dual-use nuclear facilities and related technologies; As regards those belong, the operator shall, in line with the provisions
of the present Regulations, file an application and obtain the export license for the export of dual-use nuclear facilities and related
technologies. The detailed procedures shall be formulated by the General Administration of Customs together with the MOFCOM.

Article 17

Where the recipient party violates corresponding promises made in accordance with provisions as stipulated in Article 6 of the present
Regulations or the risk of nuclear weapon proliferation and nuclear terrorist action may emerge, the MOFCOM shall terminate or revoke
the granted export license and notify related departments.

Article 18

Operators of export shall establish and strengthen the inner control system of the export of dual-use nuclear facilities and related
technologies, and take good care of the materials such as contracts, invoices, bills and documents, and business correspondence for
no less than five years. The MOFCOM may refer to and duplicate relevant materials.

Article 19

Operators of export knows or should know, or notified by the MOFCOM, that where the equipment, materials, software and related technologies
exported by them are of nuclear proliferation risk or may be used for nuclear terrorist purposes, even if the equipment, materials,
software and related technologies are not listed in the Restriction List, they shall be handled in accordance with the provisions
of the present Regulations.

Article 20

The MOFCOM, upon approval from the State Council, is empowered, together with relevant authorities of the State Council, to decide
whether or not to exercise control and administration over the export of the special dual-use nuclear facilities and related technologies
that lie outside the Restriction List in line with the present Regulations.

The export of the special dual-use nuclear facilities and related technologies stipulated in the previous paragraph shall go through
the process of application for the license in accordance with the provisions of the present Regulations.

Article 21

The MOFCOM shall organize concerned experts into consultative committee on the export of dual-use nuclear facilities and related
technologies and undertake such work as the consultancy, evaluation and explanation concerning the administration and control over
dual-use nuclear facilities and related technologies.

Article 22

The MOFCOM or the MOFCOM together with related competent departments may investigate and impede acts suspected of violating the provisions
of the present Regulations. The MOFCOM, as is necessary, may inform the Customs of the condition of the equipment, materials, software
and related technologies to be exported. As for those under the supervision of the Customs, the Customs may carry out inspection
or detainment; as for those outside the supervision of the Customs, the MOFCOM may carry out inspection or detainment. Relevant units
and individuals shall offer cooperation and assistance.

Article 23

Where dual-use nuclear facilities are exported in violation of the provisions of the present Regulations, the operator shall be punished
in accordance with the provisions of the Customs Law.

Where dual-use nuclear facilities are exported in violation of the provisions of the present Regulations, the operator shall be given
a warning by the MOFCOM and be imposed on a fine of not less than the same amount of but not more than 5 times of the amount of the
illegal business volume; where the illegal business volume is less than 50, 000 yuan, a fine of 50, 000 up to 2, 50, 000 yuan shall
be imposed. If there are illegal gains, the illegal gains shall be confiscated; if any crime is constituted, it shall be subject
to the criminal liabilities in accordance with the law.

Article 24

Where the operator forges, falsifies, or buy and sell export licenses, he shall be punished in accordance with the provisions of
related laws and administrative regulations; if any crime is constituted, it shall be subject to the criminal liabilities in accordance
with the law.

Where the export license is secured by deception or other unjust means, the export license shall be confiscated by the MOFCOM and
a fine of not less than the same amount of but not more than 5 times of the amount of the illegal business volume shall be imposed;
where the illegal business volume is less than 50, 000 yuan, a fine of 50, 000 up to 2, 50, 000 yuan shall be imposed. If there are
illegal gains, the illegal gains shall be confiscated; if any crime is constituted, it shall be subject to the criminal liabilities
in accordance with the law.

Article 25

Where public officials responsible for administration or control over the export of dual-use nuclear facilities and technologies,
neglect their duties, practice favoritism and engage in malpractices, or abuse their powers, criminal liabilities shall be affixed
where a crime is constituted; or punishment shall be imposed in accordance with related laws where a crime is not involved.

Article 26

The MOFCOM, together with the State Atomic Energy Agency and related authorities, is enpost_titled to make some adjustments to the Restriction
List in accordance with the actual situation which shall be promulgated.

Article 27

Where international treaties to which China is signatory country bear different stipulations from the present Regulations, the international
treaties shall prevail, except for those provisions for which the People’s Republic of China had stated reservation.

Article 28

Where dual-use nuclear facilities and related technologies are exported from areas under special supervision by the Customs such
as bonded area export- oriented processing zones and bonded supervising places such as export supervision warehouses and bonded logistics
centers, the present Regulations shall be applied.

The transit, transshipment and through transportation of dual-use nuclear facilities and related technologies shall be carried out
in accordance with the provisions of the present Regulations.

Article 29

The present Regulations shall come into force as of the date of promulgation.



 
The State Council
2007-01-26

 







CIRCULAR OF THE MINISTRY OF SCIENCE AND TECHNOLOGY ON DISSEMINATING THE ANNOUNCEMENT OF IMPORT TAXATION POLICY OF ENCOURAGING THE POPULARIZATION OF SCIENCE

Circular of the Ministry of Science and Technology on Disseminating the Announcement of Import Taxation Policy of Encouraging the
Popularization of Science

Guo Ke Fa Cai Zi [2007] No.55

The competent departments (commissions and bureaus) of science in all provinces, autonomous regions, municipalities, cities directly
under State planning, and all the concerned scientific and technological institutions:

The Announcement of Import Taxation Policy of Encouraging the Popularization of Science issued by the Ministry of Finance (hereinafter
referred to as the Circular) is now disseminated to you. Please have it well implemented.

Appendix: Circular of the Ministry of Finance on Import Taxation Policy of Encouraging the Popularization

Ministry of Science and Technology

February 6, 2007
Appendix:
Circular of the Ministry of Finance on Import Taxation Policy of Encouraging the Popularization of Science

Cai Guan Shui [2007] No.4

Ministry of Science and Technology, General Administration of Customs:

With the approval of the State Council, from January 1, 2006 to December 31, 2008, science & technology museums, natural museums,
planetariums, weather stations, earthquake observatories and scientific bases attached to scientific and technological institutions
open to the public will be exempted from the import tariffs and value-added taxes for the videotapes of scientific films and TV works
imported in all forms. See the appendix for the name and tax registration number of imported films and TV videos.

The scientific film and TV works to be imported by the aforementioned scientific institutions shall be ratified by local competent
departments (commissions and bureaus) of science.

The aforementioned scientific institutions shall go through procedures of tax exemption with relevant credentials in the local customs
for the confirmed scientific film and TV works to enjoy the preferential policy of taxation.

Appendix: Name and Tax Registration Number of Imported Film and TV Works (omitted)



 
Ministry of Science and Technology
2007-02-06

 







CIRCULAR OF THE MINISTRY OF COMMERCE ON ENTRUSTING SHENYANG ECONOMIC-TECHNOLOGICAL AREA TO EXAMINE, APPROVE AND ADMINISTER THE RELEVANT WORK ON FOREIGN-INVESTED ENTERPRISES IN SOME SERVICE TRADE SECTORS

Circular of the Ministry of Commerce on Entrusting Shenyang Economic-Technological Area to Examine, Approve and Administer the Relevant
Work on Foreign-invested Enterprises in Some Service Trade Sectors

Shang Zi Han [2007] No. 27

Shenyang Municipal People’s Government and Shenyang Economic-Technological Area,

Pursuant to Some Opinions on Further Promoting the Development Level of National Economic and Technical Development Zones (Guo Ban
Fa [2005] No. 15) as forwarded by the General Office of the State Council to the Ministry of Commerce, the Ministry of Land and Resources
and the Ministry of Construction as well as the provisions of the Ministry of Commerce on the authorized examination, approval and
administration of foreign-funded enterprises, the Ministry of Commerce has finished the archival filing, examination and approval
of the management systems of all the national economic and technological development zones and the connected network for examination
and approval of foreign capital. The related matters are hereby notified as follows:

1.

Upon research, we hereby authorize the Management Committee of Shenyang Economic-Technological Area to be responsible for examining,
approving and administrating the foreign-funded enterprises in related service trade sectors set up inside its zone for the purpose
of encouraging and supporting the national economic and technological development zones to vigorously develop the high value-added
service industries.

2.

The Management Committee of Shenyang Economic-Technological Area shall, in strict accordance with the laws and regulations on foreign
investments as well as the related provisions on foreign-funded enterprises of non-vessel shipping, construction, printing, construction
engineering design, road transport, commerce and international freight forwarding (see appendix), carefully examine and approve the
related foreign-funded enterprises set up within its zone, and report the related problems found in the work to the Ministry of Commerce
in a timely manner. The Ministry of Commerce shall implement the inspection of the aforesaid examination, approval and administration,
and cancel the authorization to a national economic and technological development zone which commits illegal examination and approval
during the course of authorization.

3.

The Management Committee of Shenyang Economic-Technological Area shall conduct a good job in examination and approval, archival filing
and statistical work in strict accordance with the requirements of the Ministry of Commerce for networking and online joint annual
inspection and by taking advantage of the networking certification system for foreign-funded enterprises. The related statistical
data shall be in line with the requirements so that the Ministry of Commerce can keep informed of the situation and strengthen supervision.

4.

Shenyang Economic-Technological Area, the management system of which needs to be improved, has not set up an independent finance department
yet. Shenyang Economic-Technological Area shall keep a close eye on and further resolve the problems in the management system, keep
a concise and efficient management system, and improve the level for examining, approving and administrating the foreign-funded enterprises.
Where any management system problem that may affect the work on examining, approving and administrating the foreign-funded enterprises
is found, this Ministry will withdraw the authorized power of examination, approval and administration immediately.

5.

This circular shall enter into force as of the promulgation date.

Ministry of Commerce

February 12, 2007
Appendix:
Related documents on entrusting the competent provincial departments of commerce to examine, approve and Administer foreign-funded
service trade Enterprises

1.

Circular of the Ministry of Commerce on Entrusting the Competent Provincial Departments of Commerce to Examine and Manage Foreign-funded
Non-vessel Shipping Enterprises (Shang Zi Han [2005] No. 89)

2.

Circular of the Ministry of Commerce on Entrusting the Provincial Administrative Departments of Commerce to Examine, Approve and Administer
the foreign-funded Construction Enterprises (Shang Zi Han [2005] No. 90)

3.

Circular of the Ministry of Commerce on Entrusting the Administrative Departments of Commerce at the Provincial Level to Examine and
Administer the Foreign-funded Printing Enterprises (Shang Zi Han [2005] No. 91)

4.

Circular of the Ministry of Commerce on Entrusting the Administrative Departments of Commerce at the Provincial Level to Examine and
Administer the Foreign-funded Designing Enterprises for Engineering Projects (Shang Zi Han [2005] No. 92)

5.

Circular of the Ministry of Commerce on Entrusting the Competent Provincial Departments of Commerce to Examine and Manage Some Foreign-funded
Road Transport Enterprises (Shang Zi Han [2005] No. 93)

6.

Circular of the Ministry of Commerce on Entrusting Local Departments to Check Foreign-funded Commercial Enterprises (Shang Zi Han
[2005] No. 94)

7.

Circular of the Ministry of Commerce about the related Issues on Entrusting National Economic and Technical Development Zones to Examine
and Approve foreign-funded Commercial Enterprises and International Freight Forwarding Enterprises (Shang Zi Han [2005] No. 102)

8.

Measures for the Administration of Foreign-funded International Freight Forwarding Enterprises (Decree No. 19, 2005 of the Ministry
of Commerce)



 
Ministry of Commerce
2007-02-12

 







PROVISIONS OF THE CUSTOMS OF THE PEOPLE’S REPUBLIC OF CHINA ON THE PROCEDURES FOR HANDING ADMINISTRATIVE PENALTY CASES






Decree of the General Administration of Customs

No. 159

The Provisions of the Customs of the People’s Republic of China on the Procedures for Handing Administrative Penalty Cases have been
deliberated and adopted at the executive meeting of the General Administration of Customs on February 14, 2007. They are hereby promulgated
and shall enter into force as of July 1, 2007.
Director Mou Xinsheng

March 2, 2007

Provisions of the Customs of the People’s Republic of China on the Procedures for Handing Administrative Penalty Cases
Contents
Chapter I General Rules

Chapter II General Provisions

Chapter III Case Investigation

Section 1 Case Filing

Section 2 Interrogation and Inquiry

Section 3 Check and Examination

Section 4 Testing and Authentication

Section 5 Inquiry about Deposits and Remittances

Section 6 Detention and Security

Section 7 Suspension and Termination of Investigations

Chapter IV Decisions on Administrative Penalty

Section 1 Case Examination

Section 2 Notification, Reexamination and Hearing

Section 3 Treatment Decisions

Chapter V Implementation of Decisions on Administrative Penalty

Chapter VI Procedures for Handling Simple Cases

Chapter VII Supplementary Rules
Chapter I General Rules

Article 1

In accordance with the Administrative Penalty Law of the People’s Republic of China, the Customs Law of the People’s Republic of
China, the Regulation of the Customs of the People’s Republic of China on Implementing Administrative Penalties (hereinafter referred
to as the Regulation on Implementing Customs Administrative Penalties) and other related laws and administrative regulations, the
present Provisions are formulated in order to regulate the procedures for customs houses to dispose of administrative penalty cases
and protect the lawful rights and interests of citizens, legal persons and other organizations.

Article 2

Unless it is otherwise prescribed by any law or administrative regulation, the handling of administrative penalty cases by customs
houses shall be subject to the present Provisions.

For the investigation into smuggling crimes by customs houses and the handling of public security administrative penalty cases by
public security organs, the Law of the People’s Republic of China on Public Security Administrative Penalties and the Provisions
Concerning the Procedures for Handling Administrative Cases by Public Security Organs shall apply.

Article 3

For handling of administrative penalty cases by customs houses, the principles of justness, openness, timeliness and facilitating
people shall be followed.

Article 4

For handling administrative penalty cases in a place where any minority ethnic group or by several minority ethnic groups reside,
the language commonly used in the local place shall be used for interrogating and inquiring.

An interpreter shall be provided where any related party does not know the language commonly used in that place.

Article 5

The state secrets, business secrets, customs secrets or personal privacy it has access to during the process of handling administrative
penalty cases shall be kept secret by the customs.

Chapter II General Provisions

Article 6

Where the customs house finds that any illegal act ought to be handled by any other administrative organ or the criminal investigation
organ, it shall make a case forwarding letter, and forward the case to the competent administrative organ or the criminal investigation
organ to be treated in a timely manner.

Article 7

There shall be at least 2 or customs officers (hereinafter referred to as case handlers) for handling an administrative penalty case
when making investigations and collecting evidence, and their law enforcement certificates shall be shown to the parties involved
or related persons.

Article 8

A case handler shall withdraw under any of the following circumstances, and any party involved or the agent thereof has the right
to apply for his withdrawal:

(1)

He is a party involved or a close relative thereof;

(2)

He himself or any of his close relatives has an interest in the case; or

(3)

He has any other relationship with any party involved, which so may affect impartial disposal of the case.

Article 9

The withdrawal of a case handler shall be determined by the director of the customs house directly under the General Administration
of Customs or the subordinate customs house he belongs to.

Article 10

Where any case handler requires for withdrawal, he shall submit a written application and give the reasons.

Where any circumstance under which a case handler should withdraw arises, but he fails to apply for withdrawal, and the party involved
and the agent thereof also fail to do so, the director of the customs house enpost_titled to determine his withdrawal may order him to
withdraw.

Where any party involved or the agent thereof requires the withdrawal of a case handler, he shall submit an application and give the
reasons. In the case of an oral application, the customs house shall make a record.

Article 11

As regards an withdrawal application submitted by the party involved or the agent thereof, the customs house shall, within 3 working
days, make a decision and notify the decision to the applicant in written form.

In case any party involved or the agent thereof is dissatisfied with the rejection of an withdrawal application by the customs house,
he may, within 3 working days upon receipt of the written notice, apply for review for one time to the customs house that has made
the decision, which shall make a review decision within 3 working days and inform the applicant of the decision.

Article 12

Before a decision on withdrawal is made by the customs house, the case handler may not stop the handling of the administrative penalty
case. Whether the activities relevant to the case as made by the said case handler before the decision on withdrawal is made are
effective or not shall be determined by the customs house that makes the decision on withdrawal by considering the circumstances
of the case.

Article 13

The withdrawal of the person making the testing, appraiser or interpreter shall be subject to Articles 8 through 12 of the present
Provisions.

Article 14

The types of evidence for customs houses to handle administrative penalty cases mainly include:

(1)

documentary evidence;

(2)

physical evidence;

(3)

audio-visual materials, and electronic data;

(4)

witnesses’ testimony;

(5)

testing reports and authentication conclusions;

(6)

statements of the parties involved; and

(7)

record of check and inspection.

Any item of evidence may not be taken as the basis for determining facts before it is verified upon investigation.

Article 15

The physical evidence and documentary evidence as gathered by the customs house shall be original. In case it is really difficult
to gather the originals, the pictures, videos and photocopies thereof sufficiently reflecting the contents or forms of the originals
may be taken, and the customs house may designate or entrust related entities or individuals to appropriately keep the originals.

For collecting the originals of physical evidence and documentary evidence, the customs house shall make a list with the date of collection
indicated, and ask entities or individuals involved to affix their seals or signatures upon confirmation.

For collecting the reproductions, photocopies or transcripts of the original documentary evidence kept by entities or individuals
involved, the sources thereof and the time of collection shall be indicated and the seal or signature of the entity or individual
involved shall be affixed upon verification.

For collecting the pictures and videos of the original physical evidence as kept by entities or individuals involved, a written explanation
about the production process and the storage place of originals shall be attached, and the entities or individuals involved providing
the originals shall affix their seals or signatures on the written explanations.

In case the entities or individuals involved providing the originals refuse to affix their seals or signatures, the case handlers
shall state the circumstance clearly.

Article 16

When collecting electronic data or such audio-visual materials as videos and visuals, etc., the customs house shall collect their
original carriers. In case it is really difficult to gather original carriers, duplicates thereof may be gathered, provided that
production methods, production time, producers, objects of proof as well as the storage places of the original carriers shall be
indicated, and the seals or signatures of the entities or individuals involved shall be affixed upon confirmation.

As regards the gathered duplicates of electronic data or audio-visual materials, etc., the customs house shall carry out the evidence
conversion, timely print electronic data into paper materials if possible, add attach written records to the audio materials’ vocal
contents, and ask entities or individuals involved to affix their seals or signatures upon confirmation.

Article 17

Unless it is otherwise prescribed by any law, where an illegal act has not been found within two years, no administrative penalty
may be imposed any more.

The time limit as prescribed in the preceding paragraph shall be calculated as of the date of the occurrence of the illegal act; while
it shall be calculated as of the day when the illegal act terminates in case the illegal act is in a state of continuity or incessancy.

Article 18

Time limits shall be calculated on the basis of the hour, day, month or year. The hour or day when a time limit starts may not be
included. The first working day after the holiday or rest day shall be the expiration day of the time limit, if the expiration day
is a statutory holiday or rest day.

The time limit shall exclude the time spent on the way. In case the delivery to the post has been conducted prior to the expiry of
a statutory time limit, it may not be regarded as overdue.

Article 19

Where any party involved misses the time limit by virtue of an insurmountable cause or any other justified cause, he can, within
10 days after the said cause is eliminated, apply to the customs house for postponing the time limit, and whether his application
will be permitted shall be determined by the customs house.

Article 20

Administrative legal documents shall be directly served to the addressee himself by the customs house. Where the addressee is an
unavailable citizen, his adult family member living together with him shall sign and accept the legal document; in the case of a
legal person or any other organization, the legal representative of the legal person or the main principal of any other organization,
or the person in charge of the mails of this legal person or organization shall sign and accept it; and where the addressee has entrusted
an agent for accepting legal document, the legal document may be served to this agent for signature and acceptance.

Where an administrative legal document is served directly, the addressee’s signature or seal shall be affixed on the receipt of service
and the date of receipt shall be indicated. The date of receipt indicated in the receipt of service shall be the date of service.

Article 21

Where the addressee himself or his adult family member living together reject accepting an administrative legal document or reject
affixing his signature or seal, the addressor shall invite the witnesses to be present at the scene, explain the situation, illustrate
the causes for refusal and the date on the receipt of service, affix the signatures or seals of themselves and the witnesses, and
leave the administrative legal document at the addressee’s domicile, then the administrative legal document shall be deemed as having
been served.

Article 22

In case it is difficult to directly serve an administrative legal document, the customs house may entrust another customs house to
conduct the service or serve by post.

Where the customs house entrusts another customs house to conduct the service, a power of attorney shall be given to the entrusted
customs house, which shall show the power of attorney to the parties involved.

As regards service by post, a receipt of service shall be attached, and the date of service shall be the date of receipt as indicated
in the receipt of service; and if the receipt of service has not been posted back, the date of service shall be the date of receipt
indicated in the receipt of registered letter or the inquiry letter.

Article 23

As regards the service of administrative legal documents by the customs house to foreigners, stateless persons, foreign enterprises
or organizations having a domicile within the territory of the People’s Republic of China, Articles 20 through 22 of the present
Provisions shall apply.

The customs house shall, if available, serve the administrative legal documents directly to foreigners, stateless persons, foreign
enterprises or organizations with no domicile within the territory of the People’s Republic of China. Where the addressee has entrusted
an agent for accepting legal documents, the customs house may serve directly to the agent or the representative office, or the branch
or business agent enpost_titled to accept the service of legal documents as set up within the territory of the People’s Republic of China.
Where the customs house objects to the entrustment, the power of attorney as notarized by the notary organ may be required to be
provided.

In the case of any difficulty in directly serving an administrative legal document, where the service by post is permitted by the
law of the addressee’s country, the administrative legal document may be served by post.

As regards the service of legal documents to Hong Kong, Macao and Taiwan by the customs house, the service of administrative legal
documents to foreigners, stateless persons, foreign enterprises or organizations with no domicile within the territory of the People’s
Republic of China shall be referred to.

Article 24

Where the addressee is a serviceman, the documents shall be delivered to him via the political organ at or above the regimental level
under his working army.

Where the addressee is imprisoned or reeducated through labor, the documents shall be delivered to him via the prison or the place
of labor reeducation where he is serving his term.

The date of service shall be the date of receipt as filled in the receipt of service by the addressee.

Article 25

Where a document can not be served by those service means as mentioned in Articles 20 through 24 of the present Provisions, the document
shall be served by public notice.

Where served by public notice, the original of the administrative legal document shall be posted on the customs house’s bulletin board.
Where an administrative penalty decision is served by public notice, a public notice thereof shall also be publicized on the newspaper.

In the case of the service by public notice, sixty days after the date when the public notice is publicized, the service shall be
deemed as successful. In the case of the service to a party involved without domicile within the territory of the People’s Republic
of China by public notice, six months after the public notice is publicized, the service shall be deemed as successful.

Where it is otherwise prescribed on the special methods of service in any law or administrative regulation or the international convention
that our country has entered into or acceded to, such provisions shall prevail.

Article 26

In the case of authentic illegal facts and legal basis, an administrative penalty of a fine of 50 Yuan or less (for a natural person)
or 1,000 Yuan or less (for a legal person or any other organization) or a warning may be imposed on the site in accordance with the
related provisions in Section 1 of Chapter V of the Law of the People’s Republic of China on Administrative Penalties.

Chapter III Case Investigation

Section 1 Case Filing

Article 27

Where the customs house finds any act committed by any citizen, legal person or any other organization, for which an administrative
penalty should be given, it shall put the case on file and conduct investigations.

Article 28

Where the clues about an illegal act, which the customs house has accepted or founded, falls within any of the following circumstances
upon verification, the customs house may not put the case on file:

(1)

No illegal fact exist;

(2)

The prescribed time limit for THE punishment of the illegal act has passed; or

(3)

Any other circumstance under which the case should not be put on file.

Where the customs house decides not to put a case on file, a notice of not filing the case shall be made, and timely noticed to the
tip-off maker, the clues-transferring organ or the suspected offender who has surrendered himself to justice.

Section 2 Interrogation and Inquiry

Article 29

The case handlers shall interrogate suspected offenders or inquire witnesses separately, and inform them of their rights and their
legal liabilities for falsely testifying.

A suspected offender or witness shall make statements and provide evidence according to the facts.

Article 30

A suspected offender may be interrogated at his work place or domicile, or at the customs house or a designated place as required
by the case handlers.

The case handlers may inquire a witness at his work place or domicile, or may, if necessary, request him to the customs house or a
designated place for the inquiry.

Article 31

For the interrogation or inquiry, transcripts thereof shall be made.

The items on the transcripts of interrogation or inquiry shall be completely filled in pursuant to the provisions, and the time for
commencing and ending the interrogation or inquiry shall be indicated, and the case handlers shall affix their signatures on the
transcripts.

The transcripts shall be submitted to the person being interrogated or inquired for verification or be read out to him on the site.
After the person being interrogated or inquired have verified the transcripts to be free from any mistake, he shall put his signature
or fingerprint to each page of the transcripts. Where he rejecting affixing his signature or fingerprint, the case handlers shall
record the situation down in the transcripts. Where there is any mistake or omission in the transcripts, the person being interrogated
or inquired shall be allowed to make corrections or supplementations, and his signature or fingerprint shall be affixed at the places
of corrections or supplementations.

Article 32

When a deaf or dumb person is being interrogated or inquired, a person who knows the gestures of the deaf and dumb people shall be
present at the scene, and the transcripts shall indicate the basic information about the deaf or dumb person being interrogated or
inquired.

When a foreigner or stateless person who does not know the language of China is being interrogated or inquired, an interpreter shall
be provided for him; where the person being interrogated or inquired knows the language of China and no interpreter is needed, he
shall issue a written statement, and the case handlers shall indicate it in the transcripts of interrogation or inquiry.

The name, employer and vocation of an interpreter shall be indicated in the transcripts of interrogation or inquiry. And his name
shall be affixed on the transcripts of interrogation or inquiry.

Article 33

When a suspected offender or witness is interrogated or inquired for the first time, the customs house shall inquire his name, birth
date, place of permanent residence, current address, type and number of identity card, employer, educational background, whether
any criminal or administrative penalties has been imposed on him, etc.; and shall inquire his main family members, etc. when necessary.

When a suspected offender or witness under 18, his parent or any other guardian shall be called to be present at the scene. In case
it is impossible to notify them or they fail to be present at the scene after being notified, such situation shall be indicated in
the transcripts.

Article 34

Where a person being interrogated or inquired requires for providing written statements by himself, it shall be allowed, and the
case handlers may also request the person being interrogated or inquired to write down his statements by himself when necessary.

Where a person being interrogated or inquired provides written statements by himself, his signature shall be affixed on his written
statements and the time, and place for writing down the statements as well as the subject for such statement shall be indicated.
After having received the written statements, the case handlers shall record down the date of receipt, and affix their signatures
for confirmation.

Article 35

When interrogation or inquiry is made, audio or video records, in addition to written transcripts, may be made if necessary.

Article 36

The case handlers shall carefully hear the statements of the suspected offender and the witness, and set the record straight.

Any case handler may not obtain statements by such illegal means as violence, menace, lure, fraud, etc..

Section 3 Inspection and Examination

Article 37

When the case handlers check transport vehicles and places or examine goods and articles, transcripts of inspection or examination
shall be made. The transcripts shall bear the signatures of the case handlers and the parties involved or their agents; and where
any party involved or the agent thereof is not present at the scene or rejects affixes his name or seal, the case handlers shall
indicate the situation in the transcripts, and ask the witnesses to sign or seal.

Article 38

When a suspected smuggler is under the case handlers’ inspection, the inspection shall be carried out by two or more case handlers
with identical sex to the person being inspected at a covered place or outside the sight of others than inspectors.

The inspection of the body of a suspected smuggler may be carried out under a doctor’s assistance, and if necessary, a professional
inspection may be made at a medical institution.

Section 4 Testing and Authentication

Article 39

Where, during the process of investigating a case, it is necessary to draw samples of related goods or articles for testing or authentication,
the samples shall be drawn by the customs house or by a testing or authentication institution entrusted by the customs house. At
the time of drawing samples, the parties involved or their agents shall be present at the scene; and where any party involved or
its agent is not present at the scene, witnesses shall be invite by the customs house to be present at the scene.

The samples as drawn shall be sealed for confirmation, and the transcripts on drawing samples shall be made, and the signatures or
seals of the case handlers, the staff members of the testing or authentication institution entrusted by the customs house, the parties
involved or agents thereof as well as the witnesses shall be affixed.

The samples as drawn by the customs house shall be sent to the testing or authentication institution for testing or authentication
in a timely manner.

Article 40

In case related goods or articles will be sold off or discharged by the customs house in the first place, the customs house shall
draw the samples thereof in duplicate or more; and the number of samples and the quantity of each sample shall be enough for determining
the features of related goods or articles.

Article 41

The testing or authentication shall be carried out by the customs house’s testing and authentication institution or any other state-recognized
institution as entrusted by the customs house. Related materials shall be provided by the holder or owner thereof as required for
the testing or authentication.

Article 42

A person conducting the testing or authentication shall issue a testing report or an authentication conclusion after testing or authentication.

The trustor, matters entrusted for testing or authentication, related materials provided for the testing or authentication institution,
basis for testing or authentication, scientific technical means as adopted, testing or authentication institution, instructions about
the qualification of the persons who carry out the testing or authentication, shall be indicated in a testing report or an authentication
conclusion, and signatures of the persons who carry out the testing and authentication as well as the seal of the testing or authentication
institution shall be affixed Where an authentication conclusion is drawn by analysis, the analysis process shall be indicated.

Article 43

Where any party involved is dissatisfied with the testing report or authentication conclusion, he may apply for a new testing or
authentication; and a new testing or authentication shall be conducted if the customs house finds upon examination that there are
justifiable reasons for a new testing or authentication.

The testing or authentication expenses shall be assumed by the customs house. However, when any party involved applies for a new testing
or authentication, the testing or authentication expenses shall be assumed by the customs house if the original testing or authentication
conclusion has been altered,, otherwise, the testing or authentication expenses shall be assumed by the applicant for the new testing
or authentication.

Section 5 Inquiry about Deposits and Remittances

Article 44

In case, when investigating a smuggling case, the case handlers inquire about the deposits or remittances of a suspected entity or
individual in financial institutions or postal service enterprises, the approval of the director of the customs house directly under
the General Administration of Customs or the subordinate customs house authorized by it shall be obtained.

Article 45

When inquiring about the deposits or remittances of a suspected entity or individual in financial institutions or postal service
enterprises, the case handlers shall show their law enforcement identities and present a customs notice on assistance for inquiry.

Section 6 Detention and Security

Article 46

The case handlers shall, when detaining any goods, articles, transport vehicles, other properties, account books, documents or other
materials, show their law enforcement certificates, make a detention voucher and serve it to the parties involved, inform the parties
involved of the reasons and basis for detention as well as their rights on the site.

A detention voucher shall indicate the names, specifications, quantities and weights, etc. of the detained goods, articles, transport
vehicles or other properties. In case it is impossible to determine the name, specifications, quantities and weights, etc. of the
detained goods, articles, transport vehicles or other properties, external features thereof shall be described as particularly as
possible. The signatures or seals of the case handlers, the parties involved or their agents as well as the keeper shall be affixed
to a detention voucher; and where any party involved or the agent thereof is not present at the scene or rejects affixing his signature
or seal, the case handlers shall indicate such situation in the detention voucher, and ask the witnesses to sign or seal.

The goods, articles, transport vehicles, other properties, account books, documents or other materials that have been legally detained
by the customs house may be sealed with a customs mark. The parties involved or their agents and the keeper shall keep them appropriately
after the customs mark has been affixed.

Article 47

The term for the customs house to detain goods, articles, transport vehicles, other properties, account books, documents or other
materials may not exceed one year. For satisfying the needs of investigating a case, the term may, upon approval by the director
of the customs house directly under the General Administration of Customs or the subordinate customs house authorized by it, be prolonged
for one year or less. However, the term for reconsideration or litigation may not be included.

Article 48

Where the detained goods or articles that are dangerous, fresh, perishable, easy to decay, expire or deteriorate or are unfit for
a long-term storage, or whose owner applies for advance sale need to be sold off in advance before the people’s court renders a judgment
or the customs house makes an administrative penalty decision, the approval of the director of the customs house directly under the
General Administration of Customs or the subordinate customs house authorized by it shall be obtained.

The customs house shall, prior to the sale, notify the owner of goods, articles or transport vehicles to be sold off in advance. Where
the notification could not be made prior to the sale, the customs house shall, after they have been sold off, notify it to the owner
of goods, articles or transport vehicles.

Article 49

For discharging the detention of goods, articles, transport vehicles, other properties, account books, documents or other materials,
a notice on discharging detention shall be made by the customs house and served to the parties involved. The signatures or seals
of the case handlers, the parties involved or their agents as well as the keeper shall be affixed to a notice on discharging detention;
and where any party involved or its agent is not present at the scene or rejects affixing his signature or seal, the case handlers
shall indicate such situation in the notice on discharging detention, and ask the witnesses to sign or seal.

Article 50

In case it is impossible or inconvenient to detain the goods, articles or transport vehicles suspected of being involved in a violation,
the case handlers shall make a voucher on receipt of security and serve it to the party involved or the person in charge of transport
vehicles, if the party involved or the person in charge of transport vehicles provides the security to the customs house. The voucher
on receipt of security shall be affixed with the signatures or seals of the case handlers, the parties involved, the person in charge
of transport vehicles or their agents.

After the security is received, the goods, articles or transport vehicles involved may be photographed or videoed for archival filling.

Article 51

Where the customs house discharges the security in accordance with law, it shall make and issue a notice on discharging security
and serve it to the parties involved or the person in charge of transport vehicles. The signatures or seals of the case handlers,
the parties involved, the person in-charge of transport vehicles or their agents as well as the keeper shall be affixed to a notice
on discharging security. Where any party involved, the person in charge of transport vehicles or his agent is not present at the
scene or rejects affixing his signature or seal, the case handlers shall indicate such situation in

ENTERPRISE INCOME TAX LAW OF THE PEOPLE’S REPUBLIC OF CHINA

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

No. 63

The Enterprise Income Tax Law of the People’s Republic of China has been adopted at the 5th Session of the 10th National People’s
Congress of the People’s Republic of China on March 16, 2007. It is hereby promulgated and shall go into effect as of January 1,
2008.
President of the People’s Republic of China Hu Jintao

March 16, 2007

Enterprise Income Tax Law of the People’s Republic of China

(Adopted at the 5th Session of the 10th National People’s Congress of the People’s Republic of China on March 16, 2007)

Contents
Chapter I General Rules

Chapter II Taxable Income Amount

Chapter III Payable Tax Amount

Chapter IV Preferential Tax Treatments

Chapter V Withholding by Sources

Chapter VI Special Adjustments to Tax Payments

Chapter VII Administration of Tax Levy

Chapter VIII Supplementary Rules
Chapter I General Rules

Article 1

The enterprises and other organizations which have incomes (hereinafter referred to as the enterprises) within the territory of the
People’s Republic of China shall be payers of the enterprise income tax and shall pay their enterprise income taxes according to
the present Law.

The sole individual proprietorship enterprises and partnership enterprises are not governed by the present law.

Article 2

Enterprises are classified into resident and non-resident enterprises.

The term “resident enterprise” as mentioned in the present Law means an enterprise which is set up under Chinese law within the territory
of China, or set up under the law of a foreign country (region) but whose actual management organ is within the territory of China.

The term “non-resident enterprise” as mentioned in the present Law means an enterprise which is set up under the law of a foreign
country (region) and whose actual management organ is not within the territory of China but who has organs or establishments within
the territory of China, or who does not have any organ or establishment within the territory of China but who has incomes sourced
in China.

Article 3

For its incomes sourced from both inside and outside the territory of China, a resident enterprise shall pay the enterprise income
tax.

In case a non-resident enterprise sets up an organ or establishment within the territory of China, it shall pay enterprise income
tax on its incomes sourced inside the territory of China and incomes sourced outside the territory of China but actually connected
with the said organ or establishment.

In case a non-resident enterprise has no organ or establishment within the territory of China, or its incomes have no actual connection
to its organ or establishment inside the territory of China, it shall pay enterprise income tax on the incomes sourced inside the
territory of China.

Article 4

The enterprise income tax shall be levied at the rate of 25%.

In case a non-resident enterprise obtains incomes as mentioned in Paragraph 3, Article 3 of the present Law, the tax rate shall be
20%.

Chapter II Taxable Income Amount

Article 5

The balance after the tax-free and tax-exempt incomes, each deduction item as well as the permitted remedies for losses of the previous
year(s) being deducted from an enterprise’s total income amount of each tax year shall be the taxable income amount.

Article 6

An enterprise’s total income amount refers to the monetary and non-monetary incomes from various sources and includes:

(1)

income from selling goods;

(2)

income from providing labor services;

(3)

income from transferring property;

(4)

equity investment gains, such as dividend, bonus;

(5)

interest incomes;

(6)

rental income;

(7)

royalty income;

(8)

income from accepting donations; and

(9)

other incomes.

Article 7

The tax-free income refers to the following incomes which are included in the total income amount:

(1)

The treasury appropriations;

(2)

The administrative fees and the governmental funds which are levied in accordance with the law and fall under the treasury administration;
and

(3)

Other tax-free incomes as prescribed by the State Council.

Article 8

When calculating the taxable income amount, the reasonable expenditures which actually happened and have actual connection with the
business operations of an enterprise, including the costs, expenditures, taxes, losses, etc. may be deducted.

Article 9

As regards an enterprise’s expenditures for public welfare donations, the portion within 12% of the total annual profits is permitted
to be deducted.

Article 10

When calculating the taxable income amount, none of the following expenditures may be deducted:

(1)

Such equity investment gains as dividend, bonus paid to the investors;

(2)

Payment for enterprise income tax;

(3)

Late fee for taxes;

(4)

Pecuniary punishment, fines, and losses of confiscated properties;

(5)

Expenditures for donations other than those prescribed in Article 9 ;

(6)

Sponsorship expenditures;

(7)

Unverified reserve expenditures;

(8)

Other expenditures in no relation to the obtainment of revenues;

Article 11

An enterprise’s depreciations of fixed assets, which are calculated pursuant to the related provisions, are permitted to be deducted
in the calculation of the taxable income amount.

As regards any of the following fixed assets, no depreciation may be calculated for deduction:

(1)

The fixed assets which have not yet been put into use, among which houses and buildings are not included;

(2)

The fixed assets which are rented in through commercial lease;

(3)

The fixed assets which are rented out through finance leasing;

(4)

The fixed assets for which depreciation has been fully allocated but which are still in use;

(5)

The fixed assets in no relation to the business operations;

(6)

The land which is separately evaluated and entered into account as an item of fixed asset; and

(7)

Other fixed assets for which no depreciation may be calculated for deduction.

Article 12

An enterprise is allowed to deduct the amortized expenditures of intangible assets calculated under the related provisions when calculating
the taxable amount of incomes.

For the following intangible assets, no amortized expense may be calculated:

(1)

The intangible assets, which are developed by the enterprise itself and the expenditures have been deducted when calculating the taxable
income amount;

(2)

The self-created business reputation;

(3)

The intangible assets in no relation to the business operations; and

(4)

Other intangible assets for which no amortized expense may be calculated for deduction.

Article 13

The following expenditures incurred by an enterprise shall be deemed as long-term deferred expenditures when calculating the taxable
income amount. Those amortized pursuant to the related provisions are permitted to be deducted:

(1)

The expenditures for rebuilding a fixed asset, for which depreciation has been fully allocated;

(2)

The expenditures for rebuilding a rented fixed asset;

(3)

The expenditures for heavily repairing a fixed asset; and

(4)

Other expenditures which shall be deemed as long-term deferred expenditures.

Article 14

When calculating the taxable income amount, an enterprise may not deduct the costs of the investment assets during the period of
external investment.

Article 15

In case an enterprise uses or sells its inventories, it is permitted to deduct the costs of the inventories calculated pursuant to
the related provisions when calculating the taxable income amount.

Article 16

In case an enterprise transfers an asset, it is permitted to deduct the net value of the asset when calculating the taxable income
amount.

Article 17

An enterprise may not offset the losses of its overseas business organs against the profits of its domestic business organs in the
consolidated calculation of its enterprise income taxes.

Article 18

The losses suffered by an enterprise during a tax year may be carried forward and made up by the incomes during subsequent years,
however, the carry-forward period may not exceed 5 years.

Article 19

In case a non-resident enterprise obtains incomes as prescribed in Paragraph 3, Article 3 of the present Law, the following approaches
shall be adopted in calculation of its the taxable income amount:

(1)

As regards dividends, bonuses and other equity investment gains, interests, rentals and royalties, the taxable income amount shall
be the total income amount;

(2)

As regards incomes from assigning property, the taxable income amount shall be the balance of the total income amount less the net
value of the property; and

(3)

As regards other incomes, the taxable income amount shall be calculated according to the approaches as mentioned in the preceding
two items by analogy.

Article 20

The specific scope and standards of revenues and deductions, as well as the concrete tax treatment methods of assets as prescribed
in this Chapter shall be constituted by the treasury and tax administrative departments under the State Council.

Article 21

If the enterprise’s financial or accounting treatment method does not comply with any tax law or administrative regulation when calculating
the taxable income amount, the tax law or administrative regulation shall prevail.

Chapter III Payable Tax Amount

Article 22

The payable tax amount shall be the balance of the taxable amount multiplied by the applicable tax rate minus the tax amounts deducted
and exempted as prescribed in the present Law.

Article 23

In case an enterprise has already paid overseas the enterprise tax for the following incomes, it may deduct it from the payable tax
amount of the current period. The limit of tax credit shall be the payable tax amount on such incomes calculated under the present
Law. The part exceeding the limit of tax credit may, during the five subsequent years, be offset from the balance of the limit of
tax credit of each year minus the tax amount which ought to be offset in the current year:

(1)

A resident enterprise’s taxable incomes sourced from outside the territory of China; and

(2)

Taxable incomes obtained outside the territory of China by a non-resident enterprise having organs or establishments inside the territory
of China, but having actual connection with such organs or establishments.

Article 24

As regards the dividends, bonuses and other equity investment gains earned outside the territory of China by a resident enterprise
from a foreign enterprise which it controls directly or indirectly, the portion of income tax on this income paid outside the territory
of China by the foreign enterprise the territory of China may be treated as the allowable tax credit of the resident enterprise’s
overseas income tax amount and be deducted within the limit of tax credit as provided for in Article 23 of the present Law.

Chapter IV Preferential Tax Treatments

Article 25

The important industries and projects whose development is supported and encouraged by the state shall enjoy the preferential treatments
in enterprise income tax.

Article 26

An enterprise’s following incomes of shall be tax-free ones:

(1)

The interest incomes from treasury bonds;

(2)

Dividends, bonuses and other equity investment gains generated between qualified resident enterprises;

(3)

Dividends, bonuses and other equity investment gains which are obtained from a resident enterprise by a non-resident enterprise with
organs or establishments inside the territory of China and have actual connection with such organs or establishments; and

(4)

Incomes of qualified not-for-profit organizations.

Article 27

As regards the following incomes, the enterprise income tax may be exempted or reduced:

(1)

The incomes generated from the engagement in agriculture, forestry, husbandry and fishery;

(2)

The incomes generated from investment in and business operations of the important public infrastructure projects supported by the
state;

(3)

The income generated from the projects of environmental protection, energy and water saving and satisfying the related requirements;

(4)

The incomes generated from transferring technologies and satisfying the related requirements; and

(5)

The income as provided for in Paragraph 3, Article 3 of the present Law.

Article 28

As regards a small meagre-profit enterprise satisfying the prescribed conditions, the enterprise income tax shall be levied at a
reduced tax rate of 20%.

As regards important high-tech enterprises necessary to be supported by the state, the enterprise income tax shall be levied at the
reduced tax rate of 15%.

Article 29

The autonomous organ of an autonomous region of ethnic minorities may determine to reduce or exempt the enterprise income tax by
enterprises within the said autonomous region. In case the decision on deduction or exemption is made by an autonomous prefecture
or county, it shall be reported to the people’s government of the province, autonomous region, or municipality directly under the
Central Government for approval.

Article 30

An enterprise may additionally calculate and deduct the following expenditures in the calculation of the taxable income amount:

(1)

The expenditures for researching and developing new technologies, new products and new techniques; and

(2)

The wages paid to the disabled employees or other employees encouraged to hire by the State.

Article 31

In case a startup investment enterprise engages in important startup investments necessary to be supported and encouraged by the
state, it may deduct a certain proportion of the investment amount from the taxable income amount.

Article 32

In case an enterprise surely needs to accelerate the depreciation of any fixed asset by virtue of technological progress or for any
other reason, it may curtail the term of depreciation or adopt a method for accelerated depreciation.

Article 33

As regards the incomes earned by an enterprise from producing products complying with the industrial policies of the state by comprehensively
utilizing resources, the income may be downsized in the calculation of the amount of taxable incomes.

Article 34

As regards the amount of an enterprise’s investment in purchasing special equipment for protecting environment, saving energy and
water, work safety, etc., the tax amount may be deducted at a certain rate.

Article 35

The specific measures for the preferential tax treatments as referred to in the present Law shall be constituted by the State Council.

Article 36

The State Council may constitute special preferential policies on the enterprise income tax in case the national economic and social
development so requires, or the business operations of enterprises have been seriously affected by emergencies and other factors,
and submit them to the Standing Committee of the National People’s Congress for archival filling.

Chapter V Withholding by Sources

Article 37

The payable income taxes on the incomes obtained by a non-resident enterprise as prescribed in Paragraph 3, Article 3 of the present
Law shall be withheld by sources, with the payer acting as the obligatory withholder, who shall withhold the tax amount from each
payment or payment due.

Article 38

As regards the payable income taxes on the incomes obtained by a non-resident enterprise within the territory of China from undertaking
engineering projects or providing labor services, the payer of the project price or remuneration may be designated as the obligatory
withholder by the tax organ.

Article 39

In case the obligatory withholder has failed to withhold the income tax which ought to be withheld according to Articles 37 and 38
of the present Law or is unable to perform the withholding obligation, the taxpayer shall pay them at the place where the income
has occurred. In case the taxpayer fails to do so, the tax organ may recover the payable tax of the enterprise from its other income
items within the territory of China which ought to be paid by the payer.

Article 40

A obligatory withholder shall, within 7 days after the date of withholding, turn over to the state treasury the tax payments which
it withholds every time and submit a form of report on the withheld enterprise income taxes to the local tax organ.

Chapter VI Special Adjustments to Tax Payments

Article 41

As regards a transaction between an enterprise and its affiliated parties, in case the taxable revenue or income of the enterprise
or its affiliated parties reduces by virtue of the failure to conform to the arms length principle, the tax organ may, through a
reasonable method, make an adjustment.

As regards the costs of an enterprise and its affiliated parties for jointly developing or accepting intangible assets, or jointly
providing or accepting labor services, they shall, when calculating the taxable income amount, apportion them according to the arms
length principle.

Article 42

An enterprise may propose the pricing principles and calculation methods for the transactions between it and its affiliated parties
to the tax organ, the tax organ and the enterprise shall, upon negotiations and confirmation, achieve an advance pricing arrangement.

Article 43

When an enterprise submits its annual enterprise income tax returns to the tax organ, an annual report on the affiliated transactions
between it and its affiliated parties shall be attached.

When the tax organ investigates into the affiliated transactions, the enterprise and its affiliated parties, as well as other enterprises
in relation to the affiliated transactions under investigation, shall, according to the related provisions, provide the related materials.

Article 44

In case any enterprise refuses to submit the materials on transactions which happened between it and its affiliated parties, or provides
any false or incomplete material, on the basis of which the true information about the affiliated transactions cannot be reflected,
the tax organ may determine upon check its taxable income amount.

Article 45

As regards an enterprise which is set up in a country (region) where the actual tax burden is apparently lower than the tax rate
as prescribed in Paragraph 1 of Article 4 of the present Law by a resident enterprise or controlled by an resident enterprise or
by a Chinese resident, in case it fails to distribute the profits or decreases the distribution not by virtue of reasonable business
operations, the portion of the aforesaid profits attributable to this resident enterprise shall be included in its incomes of the
current period.

Article 46

As regards an enterprise’s interest expenditures for any credit investments and equity investments accepted from its affiliated parties,
in excess of the prescribed criterion, the enterprise may not deduct them when calculating the taxable income amount.

Article 47

In case an enterprise makes any other arrangement not for any reasonable commercial purpose, which causes the decrease of its taxable
revenue or income, the tax organ may, through a reasonable method, make an adjustment.

Article 48

In case the tax organ makes an adjustment to a tax payment pursuant to the provisions in this Chapter so that it is necessary to
recover the tax payment in arrears, it shall do so and charge an additional interest according to the provisions of the State Council.

Chapter VII Administration of Tax Levy

Article 49

The administration for levying enterprise income taxes shall be subject to the Law of the People’s Republic of China on Administering
Tax Levy in addition to the present Law.

Article 50

The tax payment place of a resident enterprise shall be its registration place unless it is otherwise provided for in any tax law
or administrative regulation. But in case its registration place is outside the territory of China, the tax payment place shall be
the place at the locality of its actual management organ.

As regards a resident enterprise which has set up operational organs without legal person status inside the territory of China, it
shall, on a consolidated basis, calculate and pay its enterprise income taxes.

Article 51

In case a non-resident enterprise earns any income as prescribed in Paragraph 2, Article 3 of the present Law, the tax payment place
shall be the place at the locality of the organ or establishment. In case a non-resident enterprise has set up two or more organs
or establishments within the territory of China, it may choose to have its main organ or establishment make a consolidated payment
of the enterprise income tax upon the examination and approval of the tax organ.

As regards a non-resident enterprise which earns any income as prescribed in Paragraph 3, Article 3 of the present Law, the place
at the locality of the obligatory withholder shall be the tax payment place.

Article 52

Enterprises may not pay their enterprise income taxes on a consolidated basis unless it is otherwise prescribed by the State Council.

Article 53

Enterprise income taxes shall be calculated on the basis of a tax year, which is from January 1 to December 31 of the Gregorian calendar
year.

In case an enterprise’s business operations are started or terminated in the middle of a tax year, which leads to its actual business
operation period in this tax year being shorter than 12 months, its actual business operation period shall constitute a tax year.

When an enterprise is under liquidation according to law, the liquidation period shall be a tax year.

Article 54

Enterprise income taxes shall, on the monthly or quarterly basis, be paid in advance.

An enterprise shall submit an enterprise income tax return for advance payment to the tax organ and pay the tax in advance within
15 days after the end of a month or quarter.

An enterprise shall submit an annual enterprise income tax return for the settlement of tax payments to the tax organ and settle the
payable or refundable amount of taxes within 5 months after the end of each year.

When an enterprise submits an enterprise income tax return, the financial statements and other related materials shall be attached
in accordance with the related provisions.

Article 55

In case an enterprise terminates its business operation in the middle of a year, it shall apply to the tax organ for calculating
and paying the enterprise income taxes of the current period within 60 days after the actual date for terminating its business operations.

Before the deregistration formalities are handled, an enterprise shall make a declaration to the tax organ and pay the enterprise
income taxes on the basis of the income of the liquidation.

Article 56

Enterprise income taxes to be paid pursuant to the present law shall be calculated on the basis of RMB. In case any income is calculated
on the basis of a currency other than RMB, the taxes shall, after such income converted into RMB, be calculated and paid.

Chapter VIII Supplementary Rules

Article 57

In case an enterprise has already been set up before the promulgation of the present Law and enjoys low tax rates in accordance with
the provisions of the tax laws and administrative regulations in force at that time, it may, in accordance with the provisions of
the State Council, continue to enjoy the preferential treatments within five years as of the promulgation of the present Law and
gradually transfer to the tax rate as prescribed in the present Law. In case an enterprise enjoys the preferential treatment of tax
exemption for a fixed term, it may, after the promulgation of this Law, continue to enjoy such treatment in accordance with the provisions
of the State Council until the fixed term expires. However, if an enterprise has failed to enjoy the preferential treatment by virtue
of failure to make profits, the term of preferential treatment may be counted as of the year when the present Law is promulgated.

As regards high-tech enterprises which are newly established with the key support of the State within the particular areas set up
by law for developing foreign economic cooperation and technological exchanges or the areas enjoying the abovementioned special policies
as provided for by the State Council, they may enjoy transitional preferential tax treatments. The specific measures thereof shall
be constituted by the State Council.

As regards other enterprises falling within the encouraged category as already determined by the State Council, they may, according
to the provisions of the State Council, enjoy the preferential treatment of tax reduction or exemption.

Article 58

In case any provision in a tax treaty concluded between the government of the People’s Republic of China and a foreign government
is different from the provisions in the present Law, the provision in the said treaty shall prevail.

Article 59

The State Council shall constitute a regulation for implementing the present Law.

Article 60

The present law shall go into effect as of January 1, 2008. The Income Tax Law of the People’s Republic of China Concerning Foreign-funded
Enterprises and Foreign Enterprises as adopted on April 9, 1991 at the 4th Session of the Standing Committee of the 7th National
People’s Congress and the Interim Regulation of the People’s Republic of China Concerning Enterprise Income Tax as promulgated on
December 13, 1993 by the State Council shall be concurrently abolished.

 
The Standing Committee of the National People’ Congress of the People’ Republic of China
2007-03-16

 




OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ABOUT THE STARTING TIME OF THE IMPLEMENTATION OF CORPORATE INCOME TAX DEDUCTION AND EXEMPTION FOR NEWLY FOUNDED ENTERPRISES

Official Reply of the State Administration of Taxation about the Starting Time of the Implementation of Corporate Income Tax Deduction
and Exemption for Newly Founded Enterprises

Guo Shui Han [2007] No.365

The State Taxation Bureau of Jiangsu Province:

We have received your Request for Instructions about the Starting Time of the Implementation of Corporate Income Tax Deduction and
Exemption for Newly Founded Enterprises (Su Guo Shui Fa [2007] No.16). Upon study, we hereby render a reply as follows:

It is provided in Article 30 of the Notice of the State Administration of Taxation on Printing and Distributing the Measures for
the Administration of Tax Deduction and Exemption (for Trial Implementation) (Guo Shui Fa [2005] No. 129) that: “The present Measures
shall enter into force as of October 1, 2005. Where there is any previous provision conflicting with the present Measures, the latter
shall prevail.”, and Paragraph 2 of Article 15 of the Appendix provides that: “The production and operation day, as the starting
time for the implementation of tax deduction and exemption for a newly founded enterprise, shall be the day when the related taxpayer
gains its first income.” The two provisions may only be applicable to the enterprises set up after October 1, 2005. The judgment
on whether a taxpayer may enjoy the preferential policy on tax deduction and exemption for newly founded enterprises shall be based
on the time of its establishment instead of the time when the application for tax deduction and exemption is made. As regards an
enterprise set up prior to October 1, 2005 and gains the first income after October 1, 2005, the deducted or exempted taxes shall
be calculated subject to the provision of the Official Reply of the State Administration of Taxation about Standards for the Implementation
of Income Tax Preferences for Newly Founded Enterprises (Guo Shui Han [2003] No.1239).

The State Administration of Taxation

March 27th, 2007



 
The State Administration of Taxation
2007-03-27

 







OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ABOUT THE DETERMINATION OF PRODUCTION VALUE PROPORTION OF THE EXPORTED PRODUCTS OF FOREIGN-INVESTED EXPORT ENTERPRISES

Official Reply of the State Administration of Taxation about the Determination of Production Value Proportion of the Exported Products
of Foreign-invested Export Enterprises

Guo Shui Han [2007] No. 426

State Taxation Bureau of Qingdao:

We have received your Request for Instructions on Whether Qingdao Malsushila Electronic Components (Free Trade Zone) Co., Ltd. May
Enjoy the Tax Preference for Export Enterprises (Qing Guo Shui Fa [2006] No.125). We hereby render the reply in respect of how to
determine the production value proportion of the exported products of foreign-invested exportenterprises as follows:

Under the stipulations of Item 7 of Article 75 of the Detailed Rules for the Implementation of the Income Tax Law of the People’s
Republic of China for Foreign-invested Enterprises and Foreign Enterprises, foreign-invested export enterprises may pay their enterprise
income taxes in half under tax laws upon the expiration of their legal tax exemption and reduction period, in the event that the
value of the products exported in that year accounts for no less than 70% of their total output value in that year. Because the policy
aims at the total income of an enterprise, which includes both the income from the sales of its own products and the income from
the sales of purchased products, the standards for calculating the value of the products exported in that year and for calculating
the total output value in that year shall be consistent, and the value of the purchased products that have been sold are included
in both of the two values so as to accurately and reasonably carry out this policy.

The State Administration of Taxation

April 16, 2007



 
The State Administration of Taxation
2007-04-16

 







OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ABOUT HOW TO DEAL WITH THE TAX ISSUES CONCERNING THE INCOMES OBTAINED BY FOREIGN-FUNDED ENTERPRISES ENGAGING IN REAL ESTATE DEVELOPMENT FROM LEASEBACK BUSINESS

Official Reply of the State Administration of Taxation about How to Deal With the Tax Issues Concerning the Incomes Obtained by Foreign-funded
Enterprises Engaging in Real Estate Development from Leaseback Business

Guo Shui Han [2007] No.603

The State Taxation Bureau of Hunan Province:

We have received your Request for Instructions on Tax Issues Concerning the Incomes Obtained by Enterprises Engaging in Real Estate
Development and Operation from Leaseback Business (Xiang Guo Shui Fa [2006] No.106). We hereby make a reply as follows:

1.

In case any foreign-funded enterprise that engages in real estate development and operation transfers any estate such as premise or
building, etc, as built and developed by itself by means of distribution, and then leases back the estate from the buyer, it shall
split the leaseback business into distributing business and leasing business, and handle the tax affairs of each business respectively
whatever leasing mode it takes. The balance between the income as obtained by the enterprise from distributing or transferring the
post_title to the estate and the related cost and expenses on the post_title to the transferred estate shall be counted into the taxable amount
of income in the current period as the business profits and losses in the current period.

2.

In case any enterprise transfers one or more of the following rights and interests or risks of assets via leaseback business, it shall
be regarded as that the enterprise has transferred part or whole post_title to the estate no matter whether the formalities for the alteration
of legal ownership of the estate (such as estate rights registration or ownership transfer) has been handled:

(1)

rights and interests to obtaining the income from the appreciation of fixed assets;

(2)

assuming the losses as incurred from various kinds of damage (including physical damage and depreciation);

(3)

rights and interests to the possession of assets;

(4)

rights and interests to using assets during the period of continued existence of the assets in the future;

(5)

rights and interests to disposing the assets.

3.

With respect to any leaseback transactions of estate between an enterprise and any of its affiliated parties, the provisions of this
Reply, as well as related taxation administrative provisions on business contact between affiliated enterprises shall be applicable.

4.

Where overdue tax or tax refund is involved when handling tax affairs under the provisions of this Reply, it shall be handled pursuant
to the related provisions of the Law of the People’s Republic of China on the Administration of Tax Collection and the Detailed Rules
for its implementation.

State Administration of Taxation

May 31, 2007



 
State Administration of Taxation
2007-05-31

 







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...