Facebook
Home German Laws Page 17

German Laws

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

 






CIRCULAR OF THE MINISTRY OF FINANCE AND THE MINISTRY OF COMMERCE ON RELEVANT ISSUES CONCERNING FINANCIAL INTEREST SUBSIDY TO LOANS FOR FOREIGN CONTRACTED PROJECTS IN 2005






Ministry of Finance, Ministry of Commerce

Circular of the Ministry of Finance and the Ministry of Commerce on Relevant Issues concerning Financial Interest Subsidy to Loans
for Foreign Contracted Projects in 2005

Cai Qi [2006] No.5

Departments (Bureaus) of Finance, Commerce Authorities in Charge in all provinces, autonomous regions, and municipalities directly
under the Central Government, and cities specially designated in the state plan, Bureau of Finance and Bureau of Commerce of the
Xinjiang Production and Construction Corps, all the enterprises administered by the Central Government, and all the economic and
commercial authorities stationed in foreign countries:

In order to support and encourage the enterprises with comparative advantages to “go global”, and to further expand the business of
foreign contracted projects, and in accordance with the budget arrangement of the Central Government, interest subsidy will be granted
to commercial loans acquired from the domestic banks to fulfill the foreign contracted projects of Chinese enterprises. And a circular
on relevant issues are hereby given as follows:

I.

Required Qualifications for the Enterprise and Project Applying for Interest Subsidy

(i)

These qualifications as follows are required for the enterprise applying for interest subsidy:

1.

Legally registered and having an independent status of a legal person;

2.

Having the qualification approved by the Ministry of Commerce in foreign economic cooperation business;

3.

Having not committed such activities as falling into arrears of and misappropriating fund for joint venture or cooperation program
of foreign aid; and

4.

Accepting the guidance and coordination from the finance and commerce authorities in charge and the Chinese economic and commercial
authorities stationed in foreign countries

(ii)

The program applying for interest subsidy shall meet these conditions as follows:

1.

Submitting the statistical materials in accordance with the provisions in the Statistical System on Foreign Contracted Projects, Labor
Service Cooperation, Designing and Consulting; and

2.

The program contract shall be valid within the period from January 1, 2005 to December 31, 2005, and the contracted value of each
program shall be not less than $5 million USD (or equivalent in other currencies); and

3.

The loan contract of a program shall be valid within the period of from January 1, 2005 to December 31, 2005, and the amount of each
loan shall be not less than RMB10 million Yuan (or equivalent in other currencies); and

4.

The contract-signing enterprise shall be identical with the loan enterprise; and

5.

According with China’s policies in foreign trade and economic cooperation.

II.

The Application Document and Procedure

(i)

An enterprise applying for interest subsidy shall provide these documents as follows:

1.

An application letter for interest subsidy;

2.

A specification of the enterprise’s application (refer to Annex I for details);

3.

Basic information of the foreign contracted project and a list of interest payment for bank loans in 2005 (refer to Annex II for details);

4.

A copy of the duplicate of Business License for Enterprises as Legal Persons;

5.

A copy of the commerce part of the program contract (Chinese version or a translated version in Chinese);

6.

The written opinions concerning the implementation of contract from the Chinese economic and commercial authorities stationed in foreign
countries, including the contracted value, date of starting construction, progress of implementation, and expected date of completion
etc.;

7.

A copy of the loan contract from the bank; and

8.

A duplicated copy of the voucher of clearing for bank loan, interest payment and loan repayment.

(ii)

Procedure of Application

1.

The enterprise administered by the local government shall, before February 28, 2006, submit the aforesaid documents to the local provincial
finance and commerce authorities in charge respectively, who then shall conduct a first-instance examination on the programs applying
for interest subsidy in accordance the provisions in this Circular, fill in the Summary Statement of the First-instance Examination
on Interest Subsidy for Loan of Foreign Contracted Project (refer to Annex IV for details), and together submit them to the Ministry
of Finance and the Ministry of Commerce before March, 31 2006;

2.

The enterprise administered by the central government shall submit, together with other relevant application documents, the Summary
Statement of the First-instance Examination on Interest Subsidy for Loan of Foreign Contracted Project to the Ministry of Finance
and the Ministry of Commerce respectively before March, 31 2006;

3.

The Ministry of Finance and the Ministry of Commerce shall together release the documents on funds subject to interest subsidy, after
they entrust the intermediary institutions to examine the applied programs. And the Ministry of Commerce shall, within 15 days as
of the date of the release of these documents concerned, directly appropriate the funds subject to interest subsidy to the applicant
enterprise.

III.

Standard for Interest Subsidy

(i)

The interest subsidy rate per year for the RMB loan shall be no more than the benchmark interest rate of the corresponding period
promulgated by the People’s Bank of China, and the one for the foreign currency loan no more than 3%;

(ii)

The term limit of interest subsidy shall be calculated in accordance with the actual loan term limit on month of the Gregorian calendar;

(iii)

The time of interest subsidy for a program shall be no more than 3 years;

(iv)

Interest subsidy shall not be granted to interest increase and interest penalty outside normal loans;

(v)

Interest subsidy shall only be granted to one loan for each foreign contracted project; and

(vi)

The amount of interest subsidy shall be calculated in RMB.

IV.

The economic and commercial authorities stationed in foreign countries shall, in accordance with the requirements in item 6, paragraph
I, Article II of this Circular, issue written opinions for the applicant enterprises (refer to Annex III for details).

V.

In order to do well the work of financial interest subsidy in 2005 and to enhance the efficiency, all the enterprises are required
to prepare the application documents concerning interest subsidy and bind up them into volumes, and to compile catalogues upon program
in accordance with the provisions in this Circular.

VI.

The enterprise, upon receiving funds subject to interest subsidy, shall utilize them to subtract the financial expense of the year
concerned. Any unit may not defraud and withhold the funds subject to interest subsidy in any form or with any reason. With regard
to those in violation of the provisions, the Ministry of Finance and the Ministry of Commerce shall draw back all the funds subject
to interest subsidy and revoke their qualifications for interest subsidy, and give them serious treatment in accordance with the
Penalty Regulations on Financial Offences against the Law,

Annexes:

1.

The Specification of the Enterprise’s Application

2.

Basic Information of the Foreign Contracted Project and List of Interest Payment for Bank Loans in 2005

3.

Opinions of Office of Economic and Commercial Counselor Stationed in

4.

Summary Statement of the First-instance Examination on Interest Subsidy for Loan of Foreign Contracted Project

Ministry of Finance, Ministry of Commerce

January 9, 2006 htm/e04740.htmAnnex I

￿￿

￿￿

Annex I.

Specification of Enterprise￿￿s Application

￿￿

Name of Applicant Enterprise

 

Name of Legal Representative

 

Registration Place of Enterprise

Province,              City

Address

 

Postal Code

 

￿￿￿￿The applicant solemnly declares that:

￿￿￿￿1. The applicant applies interest subsidy for loans of              program(s) this time, and submits                application document(s);

￿￿￿￿2. The applicant has been legally registered, has a status of legal person, and conducts lawful operations;

￿￿￿￿3. All the documents, licenses and materials submitted by the applicant are exact, authentic, complete and effective;

￿￿￿￿4. All the copy documents and duplicated documentations submitted by the applicant are identical with the original ones
after checked.

￿￿￿￿5. The applicant promises to accept all the necessary examinations for screening this application by relevant authorities
in charge.

 Legal Representative of Applicant Enterprise or His/Her Entrustee  (Signature)

 Seal of Applicant Enterprise:

    Date;                    (mm/dd/yy)

Bank Account Number

 

Name of Bank Account

 

Name of Account Bank

 

Address of Account Bank

 

Contact Person of Enterprise

 

Contact Telephone

 

E-mail

 

Mobile Telephone

 

Fax

 

 

 

￿￿￿￿Notes:

￿￿￿￿1. The legal representative or his/her entrustee shall sign his/her name in hand, and personal seal is invalid.

￿￿￿￿2. In case that an entrustee signs, the original copy of the certificate of entrust signed in hand by the legal representative and
attached with the company￿￿s seal is required;

￿￿￿￿3. The bank account used for appropriated funds subject to interest subsidy shall be the company￿￿s, and it shall be correctly filled
in.

 

Annex II.

Basic Information of the Foreign Contracted Project and List of Interest Payment for Bank Loans in 2005

 






Name of Applicant Enterprise

 

Name of Borrowing Enterprise

(Seal)

Name of Program

 

Loan Bank

 

Contracted Value of Program

 

Serial Number of Loan Contract

 

Date of Signing of Program Contract

 

Amount of Loans

 

Date of Execution of Program Contract

 

The Loan is from   (mm/dd/yy) to   (mm/dd/yy)

 

Date of Starting Construction of Program

 

Loan Interest Rate

 

Expected Date of Completion of Program

 

 

 

Drawings

 

Time of Drawing

Amount of Drawing

Index Number of Duplicated Copy of Drawing Voucher

Remarks

First Time

 

 

 

 

￿￿

ANNOUNCEMENT NO. 117, 2005 OF MINISTRY OF COMMERCE, GENERAL ADMINISTRATION OF CUSTOMS, GENERAL ADMINISTRATION OF QUALITY SUPERVISION, INSPECTION AND QUARANTINE, AND STATE ENVIRONMENTAL PROTECTION ADMINISTRATION

Ministry of Commerce, General Administration of Customs, General Administration of Quality Supervision, Inspection and Quarantine,
and State Environmental Protection Administration

Announcement No. 117, 2005 of Ministry of Commerce, General Administration of Customs, General Administration of Quality Supervision,
Inspection and Quarantine, and State Environmental Protection Administration

[2005] No. 117

In order to implement international obligation of protecting Ozone Layer, carry out Vienna Convention on the Protection of Ozone Layer
and Montreal Protocol on Substances that Deplete the Ozone Layer (Adjusted and Amended), in accordance with regulations of Country
Programme of China to Phase Out Substances that Deplete the Ozone Layer and Administrative Measures on Imports and Exports of Substances
that Deplete the Ozone Layer, the Announcement notifies as follows:

1.

As from March 1, 2006, compressor for industrial or commercial use with CFCS, listed in the Appendix of this Announcement, as refrigerating
fluid shall be prohibited from imports or exports.

2.

As from March 1, 2006, compressor listed in the Appendix of this Announcement shall be subject to Commodity Catalogue for Import and
Export Inspection. While importing or exporting compressor for industrial or commercial use without CFCS, as refrigerating fluid,
the importers or exporters shall provide written certificate, which shall be based on for transacting Clearance Form of the Entry-Exit
Commodities. While importing the above-mentioned products that are subject to Administrative Measures on Commodity Automatic Import
License shall also transact Commodity Automatic Import License.

Appendix: List of Compressor for Industrial or Commercial Use with CFCS as Refrigerating Fluid (omitted)

Ministry of Commerce

General Administration of Customs

General Administration of Quality Supervision, Inspection and Quarantine

State Environmental Protection Administration

January 13, 2006

 
Ministry of Commerce, General Administration of Customs, General Administration of Quality Supervision, Inspection
and Quarantine, and State Environmental Protection Administration
2006-01-13

 



NOTICE OF THE MINISTRY OF STATE LAND AND RESOURCES CONCERNING FURTHER REGULATING THE MANAGEMENT OF REMISING OF MINING INDUSTRY RIGHTS

Ministry of State Land and Resources

Notice of the Ministry of State Land and Resources concerning Further Regulating the Management of Remising of Mining Industry Rights

Guo Tu Zi Fa [2006] No. 12

The departments of state land and resources (departments of state land, environment and resources, bureaus of state land and resources,
bureaus of state land, resources and housing, bureaus of housing, land and resources) of all provinces, autonomous regions, and municipalities
directly under the Central Government, and the Bureau of State Land and Resources of Xinjiang Production and Construction Corps:

Since the Measures for the Administration of Invitation to Bid, Auction, and Quotation Concerning Mineral Prospecting Rights and Mining
Rights (For Trial Implementation) (Guo Tu Zi Fa [2003] No. 197) were issued in 2003, the national mining industry right market construction
has been made an active progress. In light of the laws and regulations on mineral resources, and according to the requirement
of the Notice of the State Council concerning Rectifying and Regulating the Mineral Recourse Exploration Order in an All-around Way
(Guo Fa [2005] No. 28), a supplementary Notice on perfecting relevant matters as mentioned in the Measures for the Administration
of Invitation to Bid, Auction, and Quotation Concerning Mineral Prospecting Rights and Mining Rights is hereby given as follows:

I.

Classification and ways of remising of mining industry rights

In accordance with the statutory power issued prospecting permits or mining permits, the competent department of state land and
resources of the people’s governments at the county level and above shall take charge of the remising of mining industry rights
in light of the law.

(1)

Under the prospecting of Class 1 minerals listed in the Classified Catalogue for the Prospecting and Exploitation of Minerals (hereinafter
refers to as the Classified Catalogue, see appendix) and lies in the blank area of mineral prospecting work or in areas where mineral
prospecting has been carried out but further mineral prospecting place has not been obtained, the mineral prospecting right shall
be remised in light of the principle of “he who applies first gets registered first”.

(2)

The mineral prospecting rights shall be remised by bidding, auction or quotation in any of the situations as follows.

(a)

Class II minerals listed in the Classified Catalogue; or

(b)

For Class I mineral listed in the Classified Catalogue, mineral prospecting has been carried out and ore-field has been obtained for
further prospecting or prior mining activities shows there exists ore-field for further prospecting.

(3)

Prospecting right may not be created, the mining right shall be remised directly by bidding, auction or quotation in any of the situations
as follows.

(a)

Class III minerals listed in the Classified Catalogue;

(b)

For an ore-field with Class I and Class II mineral listed in the Classified Catalogue, the prospecting right has not been existed,
but the mineral prospecting has reached the extent of sifting prospecting or higher level, and the ore-field meets the exploitation
design requirements; or

(c)

For an ore-field with Class I and Class II mineral listed in the Classified Catalogue, the prospecting right has not been existed
, or prospecting activities have ever been carried out therein, and it is found upon verification that exist the mineral deposit
amount for mining or mineral resource with economic value.

(4)

The prospecting and exploitation of oil, natural gas, coal-bed gas, uranium and thorium mineral resources shall be managed and be
gradually consummated according to the prevailing provisions.

(5)

Where the remising of a prospecting right or mining right by bidding, auction or quotation is in the any of situations as follows,
the remising shall be effected by the way of the agreement after approval is obtained.

(a)

An ore-field of important mineral resource development projects approved by the State Council or an ore-field that provides matching
resources for important construction projects approved by the State Council;

(b)

The adjacent areas where it is needed to integrate the already established mining rights or to expand the prospecting and exploitation
circle by use of the original production system;

(c)

A large-scale mineral resource development project which is approved by the people’s government of the province (district or city)
and a formal document has been submitted to the Ministry of State Land and Resources for approval; or

(d)

A project financed by the state in order to search for an ore-field as a resource substitute for a mine in crisis.

The remising of prospecting right or mining right under the agreement shall be subjected to collective review and control in a rigorous
manner. The price of a prospecting right or mining right remised under the agreement shall not be lower than the market price in
similar conditions.

(6)

A prospecting right or mining right shall be remised by biding in any of situations as follows.

(a)

According to laws or regulations or the state policies, an area for which a new mineral prospecting right or mining right may be established
because it is environmentally sensitive or does not meet the environment and quality standards prescribed by the state;

(b)

The ore-field has many joint or associated compositions and the technical level requirement for comprehensive development and utilization
is high; or

(c)

Other situations prescribed in the plan on mineral resources.

II.

Other provisions

(1)

In case a prospecting right holder applies for the mining right in its prospecting area, it shall be approved if it meets the relevant
provision and its legitimate rights and interests shall be protected s.

(2)

If the prospecting application and mining application simultaneously for a same area, and it is found upon examination that the conditions
for setting a mining right are met, when an competent department of state land and resources handle the applications for any mining
industry right, a mining right shall be set according to the provisions of this Notice.

(3)

The competent department of state land and resources of each province (district or city) shall clear up and announce those ore-fields
that have been carried out mineral prospecting and mining activities and do not meet the provisions of this Notice on the remising
of the prospecting rights to the ore-fields subject to priority in application, and report the relevant information to the Ministry
of State Land and Resources for archival purposes.

(4)

In accordance with the actual situation of the area as well as the depth, geological structure and other considerations of the local
minerals prospect, the competent department of state land and resources of each province (district or city) may properly adjust
the way of remising of mining industry rights, formulate detailed administrative measures and report them to the Ministry of State
Land and Resources for archival purposes. In case it is necessary to formulate separate provisions on other special situations,
such provisions shall be implemented until they are approved by the Ministry of State Land and Resources.

(5)

The provisions of this Notice shall be more powerful than the contents in Articles 7 through 9 of the Measures for the Administration
of Invitation to Bid, Auction, and Quotation Concerning Mineral Prospecting Rights and Mining Rights (For Trial Implementation).
The competent departments of state land and resources of each province (district or city) shall clear up all former relevant provisions
according to the requirements of this Notice.

Appendix: Classified Catalogue for the Prospecting and Exploitation of Minerals(Omitted)

Ministry of State Land and Resources

January 24, 2006

 
Ministry of State Land and Resources
2006-01-24

 



MINISTRY OF COMMERCE ANNOUNCEMENT NO.4, 2006 ON INVESTIGATION OF POTATO STARCH ANTI-DUMPING REGISTRATION

Ministry of Commerce

Ministry of Commerce Announcement No.4, 2006 on Investigation of Potato Starch Anti-dumping Registration

[2006] No. 4

On Dec 29, 2005, Ministry of Commerce received applications of 7 companies including Inner Mongolia Nailun Agricultural Science and
Technology Co., LTD., Heilongjiang Wohua Potato Starch Products Co., LTD., Great Xing’an Mountains Lixue Refined Starch Company,
and so on, who represent China domestic potato starch industry to apply for anti-dumping investigation on Potato Starch originating
from European Union.

In accordance with relevant regulations of Anti-dumping Measures of the People’s Republic of China, Ministry of Commerce carried out
relevant investigations on applicant qualifications, related conditions of investigated products, related conditions of same category
products of Chinese mainland as well as influences of investigated commodities on domestic industry. In addition, Ministry of Commerce
examined and approved evidences listed in applications such as dumping, injuries, and causality between dumping and injuries. Preliminary
evidences indicated applicants were qualified to apply for anti-dumping investigation on related domestic industries in accordance
with Article 11 , Article 13 and Article 17 of Anti-dumping Measures of the People’s Republic of China. The applications also contain
required contents and related evidences of Article 14 and Article 15 of Anti-dumping Measures of the People’s Republic of China
on anti-dumping investigation registration.

In accordance with above investigation results and Article 16 of Anti-dumping Measures of the People’s Republic of China, Ministry
of Commerce decides to carry out investigations on anti-dumping registration of Potato Starch originating from European Union. Relevant
matters are now announced as follows:

The investigation period is from Jan 1, 2005 to Dec 31, 2005 and the industry injury investigation period is from Jan 1, 2002 to Dec
31, 2005.

The scope of the commodities is potato starch originating from European Union, which is under item 11081300 in Import and Export Tariff
of Customs of the People’s Republic of China.

This investigation starts on Feb 6, 2006, and usually will be ended before Feb 6, 2007. It may be prolonged to Aug 6, 2007 in case
of particularity.

Contact:

Ministry of Commerce Bureau of Fair Trade for Import and Export

Address: No.2 Dong Chang’an Avenue, Beijing, China

Zip code: 100731

Tel: 86-10-65197354, 65198497, 65198194

Fax￿￿86-10-65198172￿￿651988418

Ministry of Commerce Bureau of Industry Injury Investigation

Tel: 86-10-85226863, 85226859

Fax￿￿86-10-85226864

Ministry of Commerce

Feb 6, 2006



 
Ministry of Commerce
2006-02-06

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION AND THE MINISTRY OF COMMERCE ON FURTHER REGULATING THE BUSINESS ORDER IN FOREIGN TRADE EXPORT AND BETTER STRENGTHENING THE ADMINISTRATION OF EXPORT REBATES (EXEMPTION) FOR EXPORT GOODS

State Administration of Taxation, Ministry of Commerce

Circular of the State Administration of Taxation and the Ministry of Commerce on Further Regulating the Business Order in Foreign
Trade Export and Better Strengthening the Administration of Export Rebates (Exemption) for Export Goods

Guo Shui Fa [2006] No.24

Bureaus of State Taxes and Commerce Authorities in Charge in all provinces, autonomous regions, municipalities directly under the
Central Government, and cities specially designated in the state plan:

This Circular on relevant issues is hereby given in order to guarantee a constant, healthy and stable development for China’s foreign
trade export, to further regulate the business order in foreign trade export, to prohibit the export enterprises from engaging in
such nonstandard export operations as “Four Selfs and Three Nos ( the Four Selfs are the investor or intermediary’s bringing clients
itself, bringing supply of goods itself, bringing the bill of exchange itself and declaring at the customs itself, and the Three
Nos are the export enterprise’s having no export goods, no suppliers of goods and no foreign businessmen)” etc., to tighten the administration
of export rebates (exemption) for export goods, and to prevent and crack down such illegal and criminal activities as gaining tax
rebates by cheat.

I.

The export enterprise shall regulate its export operations, further establish and improve its internal management system, strengthen
its training on its employees, and conduct export operations strictly in accordance with the normal trade procedures. The export
enterprise shall substantively engage in the export trade activities, guarantee the authenticity of its export operations, and abide
by strictly relevant laws and regulations concerning export rebates.

II.

In order to maintain the normal business order of China’s foreign trade, to guarantee the stable operation of the national export
rebates regime, and to avoid a loss of the national property, and in case that any of these circumstances occurs in the self-support
or entrusted export operation, the export enterprise shall not apply this operation concerned to the taxation authorities for the
handling of formalities of export rebates (exemption):

1.

The export enterprise gives such documents for export rebates (exemption) as the vacant customs declaration bill for export goods,
verifying and writing-off instrument for export proceeds etc. to the freight forwarding company and customs broker without a contract
of entrust, or to other unit or individual for use except the freight forwarding company designated by the foreign importer; and

2.

The export enterprise pretends to conduct export operations in the name of self-support, while its export operations are really conducted
by other operators (enterprise, self-employed individual or other individuals) rather than the export enterprise itself or its invested
enterprises in the name of this export enterprise itself; and

3.

Where the export enterprise conduct export operations in the name of self-support, its export goods of the same batch have both purchase
contract and export brokerage contract;

4.

After the check and clearance of the customs authorities, the export enterprise itself or its entrusted freight forwarding carrier
alters the contents of such items as “name of article”, “specification” etc. in the maritime bill of lading (if transported by other
means, the transport document given by the carrier to the deliverer shall be referred to, the same hereinafter), as result of which
conflicts occur in the contents of between the customs declaration bill for export goods and the maritime bill of lading;

5.

Where the export enterprise conduct export operations in the name of self-support, it, however, fails to assume the risks of quality
of exported goods, exchange settlement or export rebates, i.e. it fails to assume the liabilities of compensation claimed by foreign
parties in case that quality problem of the exported goods occurs (except that liability-assumption concerning quality problem is
already agreed in the contract); fails to assume the liabilities of verifying and writing-off unable to be conducted due to the unscheduled
exchange settlement (except that liability-assumption concerning exchange settlement is already agreed in the contract); and fails
to assume the liabilities of export rebates unable to be conducted due to the problems in the submitted documents of export rebates;

6.

The export enterprise fails to substantively engage in the export operations, and accepts and engage in other export operations introduced
by intermediaries while conducting export operations in the name of self-support; and

7.

Other activities in violation of relevant national laws and regulations concerning export rebates.

III.

In case that the export enterprise applies for export rebates (exemption) while engaging in any of such activities as mentioned in
Article II of this Circular and once detected, the rebated (exempted) tax payment shall be recovered, and unhandled application for
export rebates (exemption) shall not be handled. With regard to those gain export rebates by cheat, the taxation authorities shall
recover their cheated tax payment, impose on them a fine of more than one time and less than five times the cheated tax payment,
and cease, with approvals from the taxation authorities of above-provincial (included) level, their rights to export rebates for
more than half a year. During the period of ceased rights to export rebates, any application of this enterprise for export rebates
(exemption) may not be handled with regard to this enterprise’s export goods in the forms of self-support, entrustment or proxy.
In case that a crime is constituted, it shall be transferred to the judicial authorities to investigate criminal liabilities.

IV.

The taxation authorities and commerce authorities in charge at all levels shall further enhance cooperation between them, do well
the work of policy publicities, guide actively the export enterprises to engage in normal export trades, regulate the business order
in foreign trade, and strengthen the administration on export rebates (exemption) for export goods. The taxation authorities in charge
of export rebates (exemption) shall do well the administration work of export rebates (exemption) application, examination, and approval
in accordance with the currently-prescribed requirements of application, examination and approval. Meanwhile, the taxation authorities
and commerce authorities in charge shall strengthen communications between them, pay close attention to the new tendencies in tax
fraudulence, and strictly treat the found activities in violation of laws and regulations, and shall not appease or connive the export
enterprises at engaging in export operations in violation of relevant national provisions and normal procedures for export operation.

V.

This Circular shall enter into force as of the date of March 1, 2006 (the date of export specified on the customs declaration bill
for export goods (exclusively used for export rebates) shall prevail).

State Administration of Taxation

Ministry of Commerce

February 13, 2006



 
State Administration of Taxation, Ministry of Commerce
2006-02-13

 






ACCOUNTING STANDARDS FOR ENTERPRISES NO. 16 – GOVERNMENT SUBSIDIES

The Ministry of Finance

Accounting Standards for Enterprises No. 16 – Government Subsidies

Cai Kuai [2006] No.3

February 15, 2006

Chapter I General Provisions

Article 1

In order to regulate the recognition, measure government subsidies, and disclose the relevant information, these Standards are formulated
in light of the Accounting Standards for Enterprises – Basic Standards.

Article 2

A government subsidy means the monetary or non-monetary assets obtained free by an enterprise from the government, but excluding the
capital invested by the government as the owner of the enterprise.

Article 3

Government subsidies consist of the government subsidies pertinent to assets and government subsidies pertinent to income.

The government subsidies pertinent to assets mean the government assets that are obtained by enterprises used for purchase or construction,
or forming the long-term assets by other ways.

The government subsidies pertinent to income refer to all the government subsides except those pertinent to assets.

Article 4

Other related accounting standards shall apply to the items as follows:

(1)

The Accounting Standards for Enterprises No. 12 – Debt Recombination shall apply to the debt exemptions; and

(2)

The Accounting Standards for Enterprises No. 18 – Income Tax shall apply to the deductions and exemptions of income tax.

Chapter II Recognition and Measurement

Article 5

No government subsidy may be recognized unless the following conditions are met simultaneously as follows:

(1)

The enterprise can meet the conditions for the government subsidies; and

(2)

The enterprise can obtain the government subsidies.

Article 6

If a government subsidy is a monetary asset, it shall be measured in the light of the received or receivable amount.

If a government subsidy is a non-monetary asset, it shall be measured at its fair value. If its fair value cannot be obtained in a
reliable way, it shall be measured at its nominal amount.

Article 7

The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed within the useful lives of
the relevant assets, and included in the current profits and losses. But the government subsidies measured at their nominal amounts
shall be directly included in the current profits and losses.

Article 8

The government subsidies pertinent to incomes shall be treated respectively in accordance with the circumstances as follows:

(1)

Those subsidies used for compensating the related future expenses or losses of the enterprise shall be recognized as deferred income
and shall included in the current profits and losses during the period when the relevant expenses are recognized; or

(2)

Those subsidies used for compensating the related expenses or losses incurred to the enterprise shall be directly included in the
current profits and losses.

Article 9

If it is necessary to refund any government subsidy which has been recognized, it shall be treated respectively in accordance with
the circumstances as follows:

(1)

If there is the deferred income concerned, the book balance of the deferred income shall be offset against, but the excessive part
shall be included in the current profits and losses; and

(2)

If there is no deferred income concerned to the government subsidy, it shall be directly included in the current profits and losses.

Chapter III Disclosure

Article 10

In its notes, an enterprise shall disclose the information concerning the government subsidies as follows:

(1)

The type and amount of the government subsidies;

(2)

The amount of the government subsidies which are included in the current profits and losses; and

(3)

The amount of the government subsidies refunded in the current period as well as the reasons.



 
The Ministry of Finance
2006-02-15

 






ACCOUNTING STANDARDS FOR ENTERPRISES NO. 30 – PRESENTATION OF FINANCIAL STATEMENTS

the Ministry of Finance

Accounting Standards for Enterprises No. 30 – Presentation of Financial Statements

No. 3 [2006] of the Ministry of Finance

February 15, 2006

Chapter I General Provisions

Article 1

With a view to regulating the presentation of financial statements and guaranteeing the commensurability between the financial statements
of a same enterprise in different periods and between the financial statements of different enterprises in a same period, the present
Standards is formulated according to the Accounting Standards for Enterprises – Basic Standards.

Article 2

The “financial statements” are structural reports on the financial status, business performance and cash flow of an enterprise, which
shall at least include the following parts:

(1)

the balance sheet;

(2)

the profit statement;

(3)

the cash flow statement;

(4)

the statement of changes in the owner’s equities (or shareholder’s equities, the same below); and

(5)

the notes.

Article 3

The preparation and presentation of a cash flow statement, and the special presentation requirements of other accounting standards
shall be subject to the Accounting Standards for Enterprises No. 31 – Cash Flow Statement and other relevant accounting standards.

Chapter II Basic Requirements

Article 4

An enterprise shall, on the basis of continuous operation, recognize and measure the actually occurred transactions and events according
to the Accounting Standards for Enterprises – Basic Standards and the provisions of other accounting standards, and then prepare
financial statements.

No enterprise may substitute the note disclosure for the recognition and measurement.

Where it is not reasonable any more to prepare financial statements on the basis of continuous operation, the enterprise shall prepare
financial statements with other basis and shall disclose this fact in its notes.

Article 5

The presentations of items in financial statements in different accounting periods shall be kept consistent, which shall not be changed
randomly with the exception of those under the following circumstances:

(1)

It is required to change the presentation of the items of financial statements according to some accounting standards; and

(2)

After great change of the nature of business operation of an enterprise, the presentation of items of post-change financial statements
can be able to provide more reliable and more relevant accounting information.

Article 6

Items with different nature or function shall be separately presented in financial statements, with the exception of those of no importance.

As for items with similar nature or function, if the category in which they fall is of importance, they must be presented separately
in the financial statements.

The term “importance” refers to that an item is of significance when the omission or false reporting thereof may affect the economic
decision-making of the user on the basis of it. Then, the item shall be considered of importance. The importance shall, in light
of the environment in which the enterprise is situated, be judged on the basis of the nature and amount of the item.

Article 7

The amounts of the items of assets and liabilities, incomes and expenses in financial statements shall not countervail each other,
unless it is otherwise provided for in other accounting standards.

The presentation of the net amount of an asset item minus the impairment provision is not an offset.

The presentation of the net amount of any gain or loss produced by any non-routine activity minus the expenses is not an offset.

Article 8

The presentation of financial statements of the current period shall at least provide the comparative data of all items of the previous
comparative period, as well as the explanations on the understanding of the financial statements of the current period, unless it
is otherwise provided for in other accounting standards.

According to the provisions of Article 5 of the present Standards, where there is any change to the items presented in the financial
statements, an adjustment shall be made to the comparative date of the previous period in light of the presentation requirements
of the current period, and the reasons and nature of the adjustment and the adjustment amount to each item shall be disclosed in
the notes. In case it is not feasible to adjust the comparative data of the previous period, the reasons for the failure of adjustment
shall be disclosed in the notes.

The term “infeasibility” refers to that an enterprise is still unable to adopt a certain provision after it makes all reasonable efforts.

Article 9

An enterprise shall, at the eye-catching place of the financial statements, disclose the following items:

(1)

the name of the presenting enterprise;

(2)

the balance sheet date or the accounting period covered by the financial statements;

(3)

the unit of RMB amount;

(4)

If the financial statements are consolidated financial statements, an indication shall be given.

Article 10

An enterprise shall at least prepare financial statements on a yearly basis. If the period covered by the annual financial statements
is less than one year, the period covered by the annual financial statements and the reasons for being less than one year shall be
disclosed.

If an enterprise offers interim financial reports to outsiders, it shall accord with the Accounting Standards for Enterprises No.
32 – Interim Financial Reports as well.

Article 11

The items that are required to be presented separately according to the present Standards, they shall be separately presented. Items
that are required to be separately presented according to other accounting standards, the items to be separately presented shall
be added.

Chapter III Balance Sheets

Article 12

The assets and liabilities shall be presented as current and non-current assets and liabilities, respectively.

As for the assets and liabilities of a financial enterprise, if the presentation based on fluidity provides reliable and more relevant
information, the assets and liabilities may be presented on the basis of the fluidity order.

Article 13

Where an asset meets any of the following conditions, it shall be classified as current assets:

(1)

It is expected to be realized, sold or consumed within a normal business cycle;

(2)

It is held mainly for trading;

(3)

It is expected to be realized within one year as of the balance sheet date (including one year, the same below); and

(4)

It is cash or cash equivalent, which is subject to no limit when it is used to exchange other assets or to pay off the liabilities
as of the balance sheet date.

Article 14

The assets other than current assets shall be classified as non-current assets, and shall be presented on the basis of their respective
nature.

Article 15

The liability that can meet the following conditions shall be classified as current liabilities:

(1)

It is expected to be repaid within a normal business cycle;

(2)

It is held mainly for trading;

(3)

It shall be repaid at maturity within one year as of the balance sheet date; and

(4)

It is an asset for which the enterprise does not have an unconditional right to delay payment more than one year after the balance
sheet date.

Article 16

The liabilities other than current liabilities shall be classified as non-current liabilities, and shall be presented on the basis
of their nature.

Article 17

As for a liability which will be at maturity within one year as of the balance sheet date, if the enterprise predicts that it can
independently extend the repayment obligation by one year or more after the balance sheet date, it shall be classified as non-current
liabilities. If it predicts that it is unable to independently extend the repayment obligation, even if an agreement on the re-arrangement
of the repayment plan is signed during the period after the balance sheet date but prior to the approval date of the financial reports,
it shall be still classified as current liabilities.

Article 18

If a liability has become payable on demand because an enterprise has breached an undertaking under a long-term loan agreement, it
shall be classified as current liabilities.

The liability is classified as non-current liabilities if the lender has agreed, on or before the balance sheet date, to provide a
grace period ending one year or more after the balance sheet date, during which the entity can rectify the breach and the lender
cannot demand immediate repayment.

Where any other long-term liability is under a similar circumstance, it shall be treated according to the provisions of the preceding
2 paragraphs.

Article 19

The category of assets in the balance sheets shall at least separately present items reflecting the following information:

(1)

money;

(2)

receivable and advance payments;

(3)

transaction investments;

(4)

inventories;

(5)

held-to-maturity investments;

(6)

long-term equity investments;

(7)

investment real estates;

(8)

fixed assets;

(9)

biological assets;

(10)

deferred income tax assets; and

(11)

intangible assets.

Article 20

The category of assets in the balance sheets shall at least include the aggregate item of current assets and non-current assets.

Article 21

The category of liabilities in the balance sheets shall at least separately present items reflecting the following information:

(1)

the short-term borrowings;

(2)

the payable and advance receipts;

(3)

the payable taxes;

(4)

the payable wages and salaries of employees;

(5)

the expected liabilities;

(6)

the long-term borrowings;

(7)

the long-term accounts payable;

(8)

the payable bonds; and

(9)

the deferred income tax liabilities.

Article 22

The category of liabilities in the balance sheets shall at least include the aggregate item of current liabilities, non-current liabilities
and liabilities.

Article 23

The category of the owner’s equities in the balance sheets shall at least separately present items reflecting the following information:

(1)

the paid-in capital (capital stock);

(2)

the additional paid-in capital;

(3)

the surplus reserves; and

(4)

the undistributed profits.

In the consolidated balance sheets, the equities of minority shareholders shall be separately presented in the category of equities.

Article 24

The category of equities in the balance sheets shall include the aggregate item of the owner’s equities.

Article 25

The balance sheets shall present the total amount of the asset items, total amount of liability items and total amount of items of
the owner’s equities.

Chapter IV Profit Statements

Article 26

The expenses shall, on the basis of functions, be classified into costs, administrative expenses, sale expenses and financial expenses
occurred in business operation.

Article 27

The profit statements shall at least separately present items reflecting the following information:

(1)

the business incomes;

(2)

the business costs;

(3)

the business taxes;

(4)

the sale expenses;

(5)

the administrative expenses;

(6)

the financial expenses;

(7)

the investment gains;

(8)

the profits and losses on the changes in fair value;

(9)

the losses on the asset impairment;

(10)

the profits and losses on the disposal of non-current assets;

(11)

the income tax expenses; and

(12)

the net profits.

The financial enterprise may, according to its particularities, present the items in the profits.

Article 28

In the consolidated profit statements, an enterprise shall, under the item of net profits, separately present the profits and losses
attributable to the parent company and the profits and losses attributable to the minority shareholders.

Chapter V Statements of Changes in the Owner’s Equities

Article 29

The statements of changes in the owner’s equities shall reflect the increases and decreases in the current period as integrate parts
of the owner’s equities. The changes in the owner’s equities, which result from the profits and losses in the current period, the
gains and losses directly recorded into the owner’s equities as well as the capital transaction with the owner (or shareholder, the
same below), shall be presented respectively.

Article 30

The statements of changes in the owner’s equities shall at least separately present items reflecting the following information:

(1)

the net profits;

(2)

the items of gains and losses directly recorded into the owner’s equities, and the total amount of the said items;

(3)

the accumulative amount affected by changes in accounting policies and estimates? and correction of errors;

(4)

the capital invested by the owners and the profits distributed to them;

(5)

the surplus reserves made according to the relevant provisions; and

(6)

the information on the balance of the paid-in capital (stock capital), additional paid-in capital, surplus reserves, and the undistributed
profits at the beginning and at end of the period, and the adjustments made to them.

Chapter VI Notes

Article 31

The notes are word descriptions or detailed information on the items presented in the balance sheets, profits statements, cash flow
statements and statements of changes in the owner’ s equities, and the explanations on the items that are not presented in these
statements.

Article 32

The notes shall disclose the basis for the preparation of financial statements. The relevant information in the notes shall be cross-referenced
with the items presented in the balance sheets, profits statements, cash flow statements and statements of changes in the owner’
s equities.

Article 33

Generally, the notes shall disclose the following items according to the following order:

(1)

the basis for the formulation of financial statements;

(2)

the declaration on compliance with the accounting standards for enterprises;

(3)

the explanations on the important accounting policies, including the basis for the measurement of items of the financial statements
and the basis for the determination of accounting policies;

(4)

the explanations on the accounting estimates, including the basis for the determination of the accounting estimates that may result
in a significant adjustment to the carrying amount of the assets or liabilities in the next accounting period;

(5)

the explanations on the changes in accounting policies and estimates? and explanations on the correction of errors;

(6)

the more detailed explanations on the important items presented in the balance sheets, profit statements, cash flow statements and
statements of changes in the owner’s equities, including the amount of the profit after the termination of business operation and
its composition; and

(7)

the contingencies and commitments, non-adjustment events occurring after the balance sheet date, the relationship of connected parties
and their transactions, and other items that need to be explanted.

Article 34

An enterprise shall, during the period after the balance sheet date but before the financial statements are authorized for issue,
disclose the total amount of dividends and the related amount per share it proposes or declares to distribute (or the total amount
of profits to be distributed to investors).

Article 35

In case an enterprise fails to disclose the following items along with other information publicized in the financial statements, it
shall disclose them in its notes:

(1)

the registered place and organizational form, and the address of its headquarters;

(2)

the nature of its business operation, and its principal business activities; and

(3)

the name of its parent company and the ultimate parent company of the group.



 
the Ministry of Finance
2006-02-15

 






CIRCULAR OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION ON RELEVANT TAXATION POLICY ISSUES CONCERNING THE SECURITIZATION OF CREDIT ASSETS

Ministry of Finance, State Administration of Taxation

Circular of the Ministry of Finance and the State Administration of Taxation on Relevant Taxation Policy Issues concerning the Securitization
of Credit Assets

Cai Shui [2006] No.5

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

In order to carry out the “Some Opinions of the State Council on Promoting the Reform, Opening and Stable Development of Capital Markets”
(Guo Fa [2004] No.3), support and increase the proportion of direct financing, improve the structure of assets and liabilities of
banks, promote financial innovation, we hereby, upon approval of the State Council, the notice concerning the relevant issues on
taxation policies for developing the business of securitization of credit assets in the banking sector of China is set forth as follows
:

1.

With regard to the issues of Stamp Duty Policies

(1)

When an initiating institution of securitization of credit assets (i.e., the financial institution that transfers credit assets through
setting up a trust project for a certain purpose [hereinafter referred to as trust project], the same hereafter) trusts a trustee
institution (i.e., the institution that takes charge of managing the trust project properties and sells asset-backed securities on
the basis of its covenant on trust, the same hereafter) with the credit assets for securitization, the stamp duty shall not be levied
on the trust contract signed between both of the parties for the time being.

(2)

When a trustee institution entrusts a loan service institution (i.e., the institution accepts commission of the trustee institution
and takes charge of managing the loans, the same hereafter) to manage credit assets, the stamp duty shall not be levied on the entrusted
management contract signed between both of the parties for the time being.

(3)

Other taxable contracts signed during the course of securitization of credit assets between an initiating institution or trustee institution
and a fund custody institution (i.e., the institution that is entrusted by the trustee institution to take charge of custody of the
funds in the account of trust project properties, the same hereafter) a securities registration and trusteeship institution (i.e.,
China Government Securities Depository Trust & Clearing Co. Ltd.) or any other institution providing services in securitized transactions
shall be exempted from the stamp duty for the said initiating institution or trustee institution for the time being.

(4)

The selling of credit asset-backed securities by the trustee institutions and the trading of credit asset-backed securities by the
investors shall be exempted from stamp duty for the time being.

(5)

The fund accounting books specially set up by initiating institutions or trustee institutions for developing the business of securitization
of credit assets shall be exempted from stamp duty for the time being.

2.

With regard to the issues of Business Tax Policies

(1)

Business tax shall be imposed on the total amount of loan interest income obtained by a trustee institution from the credit asset
trust project that it is entrusted to manage.

(2)

During the course of securitization of credit assets, the loan service institutions that have obtained their service charge income,
the trustee institutions that have obtained their trust rewards, the fund custody institutions that have obtained their entrust rewards,
the securities registration and trusteeship institutions that have obtained their trustee fees, and other institutions that provide
services to securitization transactions and have obtained their service charge incomes, etc., shall all pay business taxes in accordance
with the current business tax policies.

(3)

Business tax shall be imposed on the price differential income obtained by financial institutions (including banks and non-bank financial
institutions) as investors from the trading of credit asset-backed securities; and no business tax shall be imposed on the price
differential income obtained by non-financial institutions as investors from the trading of credit asset-backed securities.

3.

With regard to the issues of Income Tax Policies

(1)

An initiating institution that has got the income from the assignment of credit assets shall calculate and pay enterprise income taxes
in accordance with the policies on enterprise income tax, and the losses incurred as a result of the assignment of credit assets
may be deducted in accordance with the policies on enterprise income tax. The assigned credit assets that are redeemed or replaced
by initiating institutions shall be disposed in accordance with the current policies on enterprise income tax concerning assignment
of assets.

In the process of assignment, redemption and replacement, the initiating institution and the trustee institution shall pay cost and
fees in the light of business transactions between independent enterprises; otherwise the taxation organ shall make adjustment according
to the relevant provisions of the “Law on the Administration of Tax Collection”.

(2)

Enterprise income tax shall not be imposed for the time being, in the course of trust on the part of trust project proceeds allocated
to institutional investors of asset-backed securities (hereinafter referred to as institutional investors) in the same year. For
the part not allocated to the institutional investors in the same year, the trustee institution shall, in the course of trust, declare
and pay enterprise income tax in accordance with the policies on enterprise income tax. When the trust project proceeds on which
the taxes have been paid in the course of trust are allocated to institutional investors again, the institutional investors shall
be disposed in accordance with the relevant current policies concerning enterprise income tax on after-tax proceeds.

(3)

In the process of securitization of credit assets, the loan service institutions that have obtained their service charge, the trustee
institutions that have obtained their trust rewards, the fund custody institutions that have obtained their rewards, the securities
registration and trusteeship institutions that have obtained their trustee fees, and other institutions that provide services to
securitization transactions and have obtained their service charge incomes, shall all calculate and pay enterprise income tax in
accordance with the policies on enterprise income tax.

(4)

During the period when enterprise income tax is exempted from the trust project proceeds for the time being, the institutional investor
to whom proceeds are allocated from the trust project shall, in the course of institutional investment, have its taxable income confirmed
in accordance with the accrual basis, and shall calculate and pay enterprise income tax in accordance with the policies on enterprise
income tax. An institutional investor that has obtained price differential income as a result of its trading in credit asset-backed
securities shall calculate and pay enterprise income tax in accordance with the policies on enterprise income tax, and the losses
of the trading in credit asset-backed securities may be deducted in accordance with the policies on enterprise income tax.

(5)

The trustee institutions and the securities registration and trusteeship institutions shall provide the taxation authority in charge
of the trust project and the taxation authority at the institutional investor’s locality with all the information on finance of trust
project and the detailed information of the proceeds allocated to the institutional investors.

(6)

An institutional investor who obtains income of distribution as a result of liquidation of the trust project shall pay enterprise
income tax in accordance with the policies on enterprise income tax, and the losses as a result of the liquidation may be deducted
in accordance with the policies on enterprise income tax.

4.

When a trustee institution disposes of the credit assets entrusted by an initiating institution for managing, the matters not contained
in the present Notice shall be dealt with in accordance with the present taxation laws, regulations and policies.

5.

The present Notice shall come into force as of the date when the experiment of securitization of credit assets starts.

Ministry of Finance

State Administration of Taxation

February 20, 2006



 
Ministry of Finance, State Administration of Taxation
2006-02-20

 






MEASURES FOR THE ANNUAL INSPECTION OF ENTERPRISES

State Administration for Industry and Commerce

Order of the State Administration for Industry and Commerce

No. 23

The Measures for the Annual Inspection of Enterprises, which were amended at the executive meeting of the State Administration for
Industry and Commerce of the People’s Republic of China, are hereby promulgated and shall enter into effect as of the day of March
1, 2006.

Director of the State Administration for Industry and Commerce, Wang Zhongfu

February 24, 2006

Measures for the Annual Inspection of Enterprises

Article 1

In order to strengthen the supervision and administration of enterprises and maintain the order of market economy, these Measures
are formulated in accordance with the Regulation on the Company Registration Administration, the Regulation on the Registration Administration
of Enterprise Legal Persons, and the Regulation on the Registration Administration of Partnership Enterprises.

Article 2

These Measures apply to the limited companies, joint-stock limited companies, non-corporate enterprise legal persons, partnership
enterprises, sole proprietorship enterprises and their branches, the enterprises from foreign countries (regions) that engage in
business operations in China as well as other business operational entities (hereinafter referred to as the enterprises) that have
obtained business licenses.

Article 3

The annual inspection of enterprises (hereinafter referred to as the annual inspection) refers to a supervision and management system
whereby the enterprise registration organs carry out regular inspections according to law on the relevant conditions of enterprise
registration depending on the annual inspection documents submitted by the enterprises once a year.

Article 4

An enterprise shall hand in the annual inspection documents to the enterprise registration organ from March 1 to June 30 every year.
In the case of any justifiable reason, an enterprise may hand in an application for postponing the participation in annual inspection
to the enterprise registration organ before June 30, and 30 days may be postponed upon approval of the enterprise registration organ.
An enterprise shall be responsible for the authenticity of the annual inspection documents it hands in.

An enterprise registered in the current year shall be subject to the annual inspection as of the next year.

Article 5

The enterprise registration organs at all levels shall take charge of the annual inspection of the enterprises registered thereby.

An enterprise registration organ at a higher level may entrust the enterprise registration organ at a lower level for the annual inspection
of the enterprises registered thereby.

An enterprise registration organ may entrust the administrative offices for industry and commerce at the locality of enterprises registered
thereby for the annual inspection of these enterprises.

Article 6

The procedures for annual inspection shall be as follows:

(1)

An enterprise hands in its documents for annual inspection;

(2)

The enterprise registration organ accepts and examines the annual inspection documents;

(3)

The enterprise pays the fee for annual inspection; and

(4)

The enterprise registration organ affixes a seal of annual inspection on the duplicate of the business license of the enterprise and
gives back the duplicate of the business license to the enterprise.

Article 7

An enterprise shall hand in the documents for the declaration for annual inspection as follows:

(1)

An annual inspection report;

(2)

The certification of the representative or the entrusted agent designated by the enterprise;

(3)

The duplicate of the business license;

(4)

The photocopies of the relevant licensing certificates or approval documents with the seal of the enterprise if there is any business
item pertinent to pre-registration administrative license in the business scope of the enterprise; and

(5)

Other documents are required to hand in prescribed by the State Administration for Industry and Commerce.

An enterprise legal person shall hand in its annual balance sheets and profit and loss statements, and a company or foreign- funded
enterprise shall hand in the audit report issued by an accountant firm.

If an enterprise has any non-legal-person branch, it shall also hand in a photocopy of the duplicate of the branch’s business license.

An enterprise under liquidation shall only hand in the documents mentioned in Paragraph 1.

Article 8

Besides the documents submitted by a non-legal-person branch of an enterprise, the enterprises from foreign countries (regions) that
engage in business operations in China and other business operational entities mentioned in Paragraph 1 of Article 7 of these Measures,
a non-legal-person branch of an enterprise shall also need to hand in the photocopy of the duplicate of the business license of its
parent enterprise that has passed the annual inspection in the previous year, and other business operational entities shall also
need to hand in a photocopy of the qualification certification of its parent institution.

Article 9

A annual inspection report shall include the contents as follows:

(1)

The conditions on the registered items;

(2)

The conditions on the items that are kept on records;

(3)

The conditions on foreign investments;

(4)

The conditions on the establishment and cancellation of branches; and

(5)

The conditions on business operations.

The annual inspection report handed in by a non-legal-person branch of an enterprise, an enterprise from a foreign country (region)
that engages in the business operations in China or other business operational entities shall only include the contents mentioned
in Item (1) of the preceding Paragraph.

Article 10

Where an enterprise hands in comprehensive documents for annual inspection with intact contents, the enterprise registration organ
shall accept them and issue a notice on acceptance, except it affixes a seal of passing the annual inspection on the spot in accordance
with Article 12 of these Measures.

Where the submitted annual inspection documents are not comprehensive or the contents are not intact, the enterprise registration
organ shall not accept them and shall issue a notice on refusal of acceptance that indicates the reasons for the refusal of acceptance.

Article 11

An enterprise registration organ shall, within 5 workdays as of the acceptance of the annual inspection documents, accomplish the
written examination of the contents of the registered items and the recorded items concerned in the annual inspection documents handed
in by an enterprise, unless it shall need to verify the essential contents of the annual inspection documents.

Where the essential contents of the annual inspection documents need to be verified, the enterprise registration organ shall send
two or more functionaries for the verification.

Article 12

Where the annual inspection documents accord with the provisions upon examination, the enterprise registration organ shall affix a
seal of passing the annual inspection on the duplicate of the business license and return the duplicate to the enterprise; otherwise,
the enterprise registration organ shall order the enterprise to make corrections within the time limit, and after the annual inspection
documents are found to accord with the provisions, the enterprise registration organ shall affix a seal of passing the annual inspection
on the duplicate of the business license and return the duplicate to the enterprise. Where the enterprise shall implement the alteration
registration in accordance with law and the items involved in the business license thus shall be altered, the enterprise registration
organ shall affix a seal of passing the annual inspection on the duplicate of the new business license after the alteration registration.

Article 13

An enterprise registration organ shall mainly examine such contents in the annual inspection documents handed in by a company as follows:

(1)

Whether the company has used its name in accordance with the provisions, or whether the company has gone through the formalities of
alteration registration in accordance with the provisions for renaming;

(2)

Whether the company has gone through the formalities of alteration registration in accordance with the provisions for changing its
domicile;

(3)

Whether the company has gone through the formalities of alteration registration in accordance with the provisions for changing its
legal person;

(4)

Whether the company makes a false report on its registered capital, whether its shareholders or promoters have made their contributions
in accordance with the provisions or have withdrawn their capital contributions;

(5)

Whether the relevant licensing certificates or approval documents have been cancelled, revoked or have expired if there is any business
item subject to pre-registration administrative license within the business scope of the company, and whether the business operations
of the company are within the scope of its registered business operations;

(6)

Whether the company has gone through the formalities of alteration registration in accordance with the provisions for the equity transfer
of its shareholders or promoters;

(7)

Whether the business term of the company has come to the due date;

(8)

Whether the company has gone through the formalities for archival filing in accordance with the provisions for the modification of
its articles of association or alteration of its directors, supervisors or managers;

(9)

Whether the company has gone through the formalities for archival filing in accordance with the provisions for the establishment of
a branch, whether any of its branches has been cancelled or been ordered to be closed or its business license has been revoked;

(10)

Whether the liquidation group has gone through the formalities for archival filing in accordance with the provisions after the company
has come into the procedures of liquidation; and

(11)

Whether one natural person has invested to set up two or more one-person limited companies.

Article 14

An enterprise registration organ shall mainly examine such contents in the annual inspection documents handed in by a non-corporate
enterprise legal person as follows:

(1)

Whether the enterprise has used its name in accordance with the provisions, or whether the enterprise has gone through the formalities
of alteration registration in accordance with the provisions for it’s renaming;

(2)

Whether the enterprise has gone through the formalities of alteration registration in accordance with the provisions for changing
its domicile or business place;

(3)

Whether the enterprise has gone through the formalities of alteration registration in accordance with the provisions for changing
its legal person;

(4)

Whether the enterprise has gone through the formalities of alteration registration in accordance with the provisions for changing
its economic nature;

(5)

Whether the relevant licensing certificates or approval documents have been cancelled, revoked or expired if there is any business
item subject to pre-registration administrative license in the business scope of the enterprise, and whether the business operations
of the enterprise are within the scope of its registered business operations;

(6)

Whether have the act of withdrawn or transferred the registered capital;

(7)

Whether the business term of the enterprise has come to the due date;

(8)

Whether the enterprise has gone through the formalities of alteration registration in accordance with the provisions for the setting
up or cancellation of any branch;

(9)

Whether the enterprise has gone through the formalities for archival filing in accordance with the provisions for changing its department
in-charge; and

(10)

Whether the enterprise has modified its articles of association.

Article 15

An enterprise registration organ shall mainly examine such contents in the annual inspection documents handed in by a partnership
enterprise as follows:

(1)

Whether the enterprise has used its name in accordance with the provisions, or whether the enterprise has gone through the formalities
of alteration registration in accordance with the provisions for renaming;

(2)

Whether the enterprise has gone through the formalities of alteration registration in accordance with the provisions for changing
its business place;

(3)

Whether the enterprise has gone through the formalities of alteration registration in accordance with the provisions for changing
the partner in charge of partnership affairs;

(4)

Whether the relevant licensing certificates or approval documents have been cancelled, revoked or have expired if there is any business
item subject to pre-registration administrative license within the business scope of the enterprise, and whether the business operations
of the enterprise are within the scope of its registered business operations;

(5)

Whether the business operational mode of the enterprise is within the scope of its registered business operational modes;

(6)

Whether the enterprise has gone through the formalities of alteration registration in accordance with the provisions for changing
the name or domicile of any of its partners;

(7)

Whether the enterprise has gone through the formalities of alteration registration in accordance with the provisions for changing
the amount or mode of contribution of any of its partners; and

(8)

Whether the enterprise has gone through the formalities of alteration registration in accordance with the provisions for the setting
up or cancellation of any of its branches.

Article 16

An enterprise registration organ shall mainly examine such contents in the annual inspection documents handed in by a sole-investor
enterprise as follows:

(1)

Whether the enterprise has used its name in accordance with the provisions, or whether the company has gone through the formalities
of alteration registration in accordance with the provisions for renaming;

(2)

Whether the enterprise has gone through the formalities of alteration registration in accordance with the provisions for changing
its domicile;

(3)

Whether the enterprise has gone through the formalities of alteration registration in accordance with the provisions for changing
the name or domicile of its contributor;

(4)

Whether the relevant licensing certificates or approval documents have been cancelled, revoked or expired if there is any business
item subject to pre-registration administrative license within the business scope of the enterprise, and whether the business operations
of the enterprise are within the scope of its registered business operations;

(5)

Whether the business operational mode of the enterprise is within the scope of the registered business operational modes; and

(6)

Whether the enterprise has gone through the formalities of alteration registration in accordance with the provisions for changing
the amount or mode of contributions of the contributor.

Article 17

An enterprise registration organ shall mainly examine such contents in the annual inspection documents handed in by a non-legal-person
branch of an enterprise, an enterprise from a foreign country (region) that engaged in business operations in China or any other
business operational entity as follows:

(1)

Whether the relevant enterprise has used its name in accordance with the provisions, or whether it has gone through the formalities
of alteration registration in accordance with the provisions for renaming;

(2)

Whether the relevant enterprise has gone through the formalities of alteration registration in accordance with the provisions for
changing its business (operation) place;

(3)

Whether the relevant enterprise has gone through the formalities of alteration registration in accordance with the provisions for
changing its person-in-charge;

(4)

Whether the relevant licensing certificates or approval documents have been cancelled, revoked or expired if there is any business
item subject to pre-registration administrative license within its business scope, and whether its business operations are within
the scope of its registered business operations; and

(5)

Whether any other business entity has gone through the formalities of alteration registration in accordance with the provisions for
changing its parent institution.

Article 18

An enterprise registration organ or administrative office for industry and commerce that is authorized to implement the annual inspection
shall report the annual inspection circumstance to the authorizing enterprise registration organ before July 31.

An enterprise registration organ shall, before July 31, report the annual inspection circumstance to the administrative office for
industry and commerce at the locality of enterprises, and the administrative office for industry and commerce shall bring the annual
inspection information into the economic registration information of the enterprises.

Article 19

If an enterprise fails to accept the annual inspection in accordance with the provisions, the enterprise registration organ shall
order it to accept the annual inspection within the time limit. If it is a company, it shall be imposed a fine from RMB 10, 000 Yuan
to RMB100, 000 Yuan. If it is a subsidiary, a non-corporate enterprise legal person or any of its branches or an enterprise from
a foreign country (region) that engages in business operations in China or any other business operational entity, it shall be imposed
a fine less than RMB 30,000 Yuan. And if it is a partnership enterprise, a sole-investor enterprise or any of its branches, it shall
be imposed a fine less than RMB 3,000 Yuan.

If an enterprise still fails to accept the annual inspection within the time limit after being ordered to do so, the enterprise registration
organ shall announce it. If it still fails to accept the annual inspection within 60 days as of announcement, its business license
shall be revoked in accordance with law.

Article 20

If an enterprise keeps from actual situation or resorts to deceits in the annual inspection, the enterprise registration organ shall
order it to make corrections within the time limit. If it is a company, it shall be imposed a fine from RMB10, 000 Yuan to RMB 50,000
Yuan. Where the circumstance is serious, its business license shall be revoked. If it is a subsidiary, a non-corporate enterprise
legal person or any of its branches or an enterprise from a foreign country (region) that engages in business operations in China
or any other business entity, it shall be imposed a fine less than RMB 30,000 Yuan. If it is a partnership enterprise, a sole-investor
enterprise or any of its branches, it shall be imposed a fine less than RMB 3,000 Yuan.

Article 21

Where an enterprise registration organ finds, in the course of annual inspection, that an enterprise commits any act in violation
of the provisions on enterprise registration administration, it may, except to order the enterprise to make corrections give punishment
on the enterprise in accordance with the provisions on enterprise registration administration.

Article 22

Where an enterprise registration organ or any of its functionaries refuses to implement the annual inspection for an enterprise which
accords with the provisions or implements the annual inspection for an enterprise which fails to accord with the provisions, or arbitrarily
charges fees by taking advantage of annual inspection, charges fees by making use of annual inspection, deducts other fees, asks
for or accepts property or money of others or seeks for other interests, the principal and other persons who are directly responsible
shall be subject to the corresponding liabilities n accordance with the laws and disciplines.

Article 23

The formats of the reports on annual inspection and the styles of the seals for annual inspection shall be uniformly regulated by
the State Administration for Industry and Commerce.

Article 24

These Measures shall be implemented as of March 1, 2006. The Measures for the Annual Inspection of Enterprises, which was promulgated
on December 13, 1996(Order of the State Administration for Industry and Commerce, No.61) and was amended on December 3, 1998 (Order
of the State Administration for Industry and Commerce, No.86), shall be abolished simultaneously.



 
State Administration for Industry and Commerce
2006-02-24

 






1...161718...83Page 17 of 83

CONSTITUTION ACT, 1982 – page 22

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

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

Disclaimer: There is no confidential attorney-client relationship formed by using Laws.com website and information provided on this site is not legal advice. For legal advice, please contact your attorney. Attorneys listed on this website are not referred or endorsed by this website. By using Laws.com you agree to Laws.com Terms Of Use.
Facebook
© LAWS.COM NETWORK 2023-2024