Questions about New PIT Law Relating to Foreigners 

 By Zhang Fan

The new Personal Income Tax Law took effect on 1st January 2019, which was followed by a set of relevant rules, for example, the Regulations for the Implementation of the Personal Income Tax Law and the Temporary Rules on Special Expense Deductions Relating to Personal Income Tax. We should be prepared for the effect of such rules on individual tax payment obligations of foreign passport holders or people with permanent residence in a foreign country. I have been asked for advice on this several times. This article is intended to list and give brief answers to frequently asked questions by taking into account the above new rules and other laws and regulations now in effect................More

Can Bruce Lee's Daughter Stop Real Kung Fu Using His Image in Its Brand?

By You Yunting

According to a news report, Bruce Lee Enterprises, LLC (“Bruce Lee Company”) represented by his daughter recently sued the big restaurant chain Guangzhou Real Kung Fu Restaurant Co., Ltd. (“Real Kung Fu Company”) to the Shanghai No.2 Intermediate Court, claiming that the company should immediately stop using the image of Bruce Lee, pay damages of 210 million and declare that it had no relationship with Bruce Lee on a publication for consecutive 90 days................More

1.Securities Law of the People’s Republic of China (Revised)

Promulgated by the Standing Committee of the National Congress

Promulgation date: 28 December 2019

Implementation date: 1 March 2020                            

The main purpose of the new securities law is to advance the issuance system reform, which is reflected by four changes. First, conditions for issuance of securities are simplified and optimized. In the requirements for issuing shares, “having the ability to continue making profits” is changed to “having the ability to continue running the business”. In addition, conditions for issuing bonds to the public are simplified. Second, securities issuance procedures are adjusted. The issuance review committee no longer exists. It is clear that securities exchanges and other organizations can review securities issuance applications in accordance with relevant regulations. Third, the securities issuance information disclosure system is improved. It is clearly stated that in securities issuance application documents issuers should fully disclose information necessary for investors to make evaluation and investment decisions in true, accurate, complete, clear, concise and accessible forms. Fourth, the scope and steps of implementation of the securities issuance registration system are decided by the state council so that the system allows for implementing the registration system step by step. (Source: Website of the Xinhua News Agency) 

http://www.xinhuanet.com/2019-12/29/c_1125399656.htm    

2.Basic Medical Treatment, Public Health and Healthcare Promotion Law of the People’s Republic of China

Promulgated by the Standing Committee of the National Congress 

Promulgation date: 28 December 2019

Implementation date: 1 June 2020

The Basic Medical Treatment, Public Health and Healthcare Promotion Law sets out basic policies and rules for the Chinese medical and health sector, including basic medical and health policies, medical institution classification policy, basic medical service network and multi-level healthcare systems. It further states that medical and healthcare services should in principle concentrate on the public, improve health conditions of the public and do activities for non-profit purposes. (Source: Website of the Xinhua News Agency)

http://www.xinhuanet.com/politics/2019-12/28/c_1125399629.htm                         

3.Community Rectification Law of the People’s Republic of China 

Promulgated by the Standing Committee of the National Congress

Promulgation date: 28 December 2019

Implementation date: 1 July 2020

The Community Rectification Law consists of nine chapters and sixty three articles with admirable points. First, community rectification objectives and principles are clarified. 90% of people at whom community rectification is aimed now are probationers. Appropriate regulations and suitable rectification measures that take full advantage of all aspects of the society in rectification education will help people under community rectification to go back to the society. The Community Rectification Law clearly states that community rectification is intended to “help people involved be well accepted into the society in order to prevent and reduce crimes”. Community rectification is performed in different ways including supervision and education by different people including agencies and social groups, using classification and individualization methods to effectively eliminate factors that may cause people under community rectification to commit crimes again and help them behave legally. Second, social groups are encouraged and motivated to take part in community rectification. By the Community Rectification Law, the government encourages and helps companies and public services, organizations, volunteers and other social groups to legally work on community rectification. Resident and villager committees may lead volunteers and people in their community and use the community’s resources to educate and support special people under community rectification in different ways. Community rectification organizations may pay for social work or other social services openly selected and give people under community rectification necessary aid in education, psycho-education, professional skill training, social relation improvement, etc. (Source: Website of the Xinhua News Agency)

http://www.xinhuanet.com//2019-12/28/c_1125399530.htm                         

4.Decision on Amendment of the Regulations about Evidence Used in Civil Actions

Promulgated by the Supreme People’s Court

Promulgation date: 26 December 2019

Implementation date: 1 May 2020

The Amendment Decision controls acts in legal actions of parties involved in two respects. First, stricter control before the fact. Before questioning parties involved about the facts of a case, Chinese courts order the parties to sign an affidavit and read out, promising that their statements are true with no hidden, not misrepresented, removed or added part and agreeing to be punished for misrepresentation, etc., in order to restrict them mentally. Second, stricter punishment after the fact. It is clear that parties involved have the obligation to give true and complete accounts of the case facts. In case of non-compliance of this obligation and deliberately falsified representations that adversely affect a court hearing the case, the court should administer punishment following “compulsory measures against adverse effect on civil actions” included in the Civil Action Law. There are similar measures to witnesses. These regulations can help control civil actions, cause parties involved to bring actions in good faith and ensure courts ascertain the facts, know right from wrong and are able to decide correctly. (Source: Website of the Supreme People’s Court)

http://www.court.gov.cn/fabu-xiangqing-212711.html        

5.Interpretation of Several Issues Concerning the Application of the Foreign Investment Law of the People’s Republic of China

Promulgated by the Supreme People’s Court

Document number: L.I.[2019] No.20

Promulgation date: 26 December 2019

Implementation date: 1 January 2020                            

The top aim of the Interpretation is to ensure the Foreign Investment Law is carried out fairly and efficiently in judicial areas in order to fully implement the momentous decision of the Party’s Central Committee about protecting legal rights and interests of Chinese and foreign investors openly, equally and legally and creating a stable, fair, transparent and legalized business environment. This means that Chinese courts should perform their duties to hear and decide cases, get the heart of matters and work to improve the overall situation. The Interpretation is intended to provide excellent and effective legal services and measures to achieve marketalization, legalization and internationalization objectives of the reform, create a market environment where Chinese and foreign investors compete fairly and attract more foreign investment by improving the investment environment. Authorities hearing and deciding commercial cases involving foreigners have been working for years to gain international credibility in our judicial system and make our place a good choice for people to bring actions. (Source: Website of the Supreme People’s Court) 

http://www.court.gov.cn/fabu-xiangqing-212921.html         

6.Net Capital Management Rules for Finance Subsidiaries of Commercial Banks (on an Experimental Basis)

Promulgated by the China Banking and Insurance Regulatory Commission

Document number: No.5 Order of the China Banking and Insurance Regulatory Commission 

Promulgation date: 29 November 2019

Implementation date: 1 March 2020                            

The Rules includes the following regulatory requirements: First, responsibilities of people involved are implemented. The board of directors of finance subsidiaries are ultimately responsible for managing the company’s net capital. Senior management are responsible for organizing and performing net capital management and should submit a written report of net capital management to the board of directors at least once a quarter. Second, regulatory statement requirements are clarified. finance subsidiaries should regularly submit regulatory statements of net capital and be responsible for the authenticity, accuracy and completeness of such statements. Third, responsibility for reporting important matters is clarified. If net capital, the proportion of net capital to net assets, the proportion of net capital to venture capital or other indicator of a finance subsidiary changes by more than 20% over the end of the previous report period or does not meet regulatory requirements, a written report should be submitted with an explanation of reasons for this to the authority in charge of overseeing and administering the banking industry, which can take relevant regulatory measures to finance subsidiaries that do not meet net capital management requirements. (Source: Website of the China Banking and Insurance Regulatory Commission) 

http://www.cbirc.gov.cn/cn/view/pages/ItemDetail.html?docId=857295&itemId=915&generaltype=0   

Picture of the month:

Photographer: Lawyer Ni Tinggang

Caption: Lake Sagamiko, Kanagawa, Japan, December 2019