JC Master Legal News Issue 1041
Release Date:
2022-11-14 14:45
Key Takeaways for This Issue
The China Securities Regulatory Commission and the Ministry of Finance have jointly issued the “Provisions on Matters Concerning the Priority Use of the Property of Persons Who Have Committed Securities Law Violations to Assume Civil Compensation Liability.”
The issuance of these Regulations represents an important measure to implement the people-centered development philosophy and to earnestly carry out the practical initiative “Doing Concrete Things for the People.” It also responds to evolving legal and regulatory conditions in the capital market and addresses the pressing need to effectively safeguard the legitimate rights and interests of investors.
The Shanghai Stock Exchange and the Aviation Industry Corporation of China, Ltd. have signed a strategic cooperation agreement.
The Aviation Industry Corporation will take this signing as an opportunity to thoroughly implement the spirit of the 20th National Congress of the Communist Party of China, keep in mind the nation’s paramount interests, strengthen strategic cooperation with the Shanghai Stock Exchange, establish a regularized mechanism, conduct tiered and phased information exchanges, make full use of the capital market, advance specialized integration, shape a new industrial landscape, and strive to provide robust support and solid guarantees for building a world-class military.
Announcement of the Ministry of Finance and the State Taxation Administration on Personal Income Tax Policies Related to Individual Pension Schemes
The Ministry of Finance and the State Taxation Administration jointly issued the “Opinions of the General Office of the State Council on Promoting the Development of Individual Pension Schemes,” under which a deferred tax policy for individual pensions will be implemented effective January 1, 2022.
The Supreme People’s Court has issued guidelines to refine the allocation of powers and responsibilities among collegial panels and to improve the mechanisms governing their operation.
The Opinions further refine the mechanism for constituting collegial panels, improve the duties of panel members, the rules governing deliberations, and the procedures for drafting judicial documents, and establish regulatory provisions addressing key issues such as the operation of collegial panels in conjunction with the supervisory and administrative responsibilities of court presidents and division heads, as well as the coordination of oversight mechanisms for “four categories of cases.”
Finance and Capital Markets
FINANCE &CAPITAL MARKETS
The China Securities Regulatory Commission and the Ministry of Finance have jointly issued the “Provisions on Matters Concerning the Priority Use of the Property of Persons Who Have Committed Securities Law Violations to Assume Civil Compensation Liability.”
To implement the feedback from the Central Inspection and to put into practice the development philosophy of putting the people at the center, to ensure the effective application of the principle that civil compensation liability takes priority, and to earnestly safeguard the legitimate rights and interests of investors, in accordance with the Securities Law of the People’s Republic of China, the Implementing Rules of the Regulations on the State Treasury of the People’s Republic of China, and other relevant provisions, the China Securities Regulatory Commission and the Ministry of Finance have jointly formulated the “Provisions on Matters Concerning the Priority Use of the Property of Persons Who Have Committed Securities Violations to Fulfill Civil Compensation Liabilities” (hereinafter referred to as the “Provisions”), which shall take effect from the date of their promulgation.
The Regulations were publicly released for public comment from March 11 to April 10, 2022, and received overwhelmingly positive feedback. During this period, a total of 28 comments were submitted; the China Securities Regulatory Commission, in coordination with the Ministry of Finance, reviewed each one carefully and duly incorporated relevant suggestions. The Regulations comprise fourteen articles, covering key aspects such as the eligible applicants, application deadlines, required documentation, and procedural steps, and they establish a specific mechanism for allocating administrative fines and confiscations paid by wrongdoers to meet civil compensation obligations.
The principle of priority for civil liability is enshrined in multiple legal domains, and the Regulations are the first to implement it within the securities sector, thereby playing a highly significant and positive role in safeguarding investors’ legitimate rights and interests. The promulgation of these Regulations represents an important step in putting into practice the people-centered development philosophy and in earnestly carrying out the “Doing Practical Things for the People” campaign. It also responds to evolving legal conditions in the capital market and addresses the pressing need to effectively protect investors’ lawful rights and interests. With the refinement of the civil compensation regime under the Securities Law, the issuance of judicial interpretations on securities class actions, the amendment of the judicial interpretation on civil compensation for false statements, and the entry into force of these Regulations, a Chinese‑style civil compensation system for securities matters—covering everything from adjudicatory standards and litigation procedures to mechanisms for ensuring compensation—has essentially taken shape.
Going forward, the China Securities Regulatory Commission and the Ministry of Finance will earnestly implement the requirements set forth in the Regulations, strive to ensure that this important initiative is carried out effectively, and safeguard the legitimate rights and interests of investors.
The China Securities Regulatory Commission and the State-owned Assets Supervision and Administration Commission of the State Council have jointly issued the “Notice on Supporting Central Enterprises in Issuing Science and Technology Innovation Corporate Bonds.”
In recent years, the China Securities Regulatory Commission (CSRC) has actively promoted the establishment of a bond‑financing support system that covers the entire lifecycle of science and technology innovation enterprises. In 2017, it launched bonds for innovative and entrepreneurial companies, broadening financing channels for start-ups and growth‑stage offices; in 2021, it initiated a pilot program for science‑and‑technology innovation corporate bonds, extending eligibility to mature enterprises undergoing transformation and upgrading; and in 2022, it transitioned this pilot to a regular framework, bringing innovative and entrepreneurial bonds under the unified management of the science‑and‑technology innovation corporate bond program. At the same time, it further refined institutional measures related to issuers, use of proceeds, information disclosure, and ancillary arrangements, and issued relevant business guidelines. The State-owned Assets Supervision and Administration Commission (SASAC) has encouraged central enterprises to seize the opportunities presented by bond‑market reforms and development, proactively participating in the pilot issuance of science‑and‑technology innovation corporate bonds, thereby providing medium- and long-term funding to bolster high‑level scientific and technological self‑reliance and strength. To date, these bonds have supported over 130 enterprises in raising nearly RMB 140 billion, with funds primarily directed toward cutting‑edge sectors such as integrated circuits, artificial intelligence, and advanced manufacturing, helping accelerate the translation of scientific and technological achievements into real productive capacity. The joint issuance of the “Notice” by the CSRC and SASAC represents a concrete step to enhance the capital market’s service capabilities, promote the optimal allocation of innovation resources, and better serve both technological innovation and the real economy. This initiative will help strengthen the new national system for scientific and technological innovation, enabling central enterprises to take the lead in establishing hubs for original technologies; deepen industry–university–research collaboration under enterprise leadership, raising the level of technology transfer and industrialization; reinforce the role of enterprises as the main drivers of technological innovation; leverage the leading and supporting roles of key technology‑oriented enterprises; foster a favorable environment for the growth of small and micro‑enterprises in the tech sector; and advance the deep integration of the innovation chain, industrial chain, financial chain, and talent chain.
The key provisions of the Notice include: first, adopting a multi‑pronged approach—by optimizing market service mechanisms, regulatory assessment criteria, and financing decision‑making procedures—to support central enterprises in issuing science‑and‑technology innovation corporate bonds and raising capital; and actively encouraging these enterprises to pilot REITs in emerging infrastructure sectors such as data centers, the industrial internet, and artificial intelligence, thereby facilitating the revitalization of existing assets and expanding effective investment. Second, encouraging central enterprises to increase R&D spending while leveraging the raised funds—through equity investments, supply‑chain finance, park‑based incubation, and other channels—to foster innovative collaboration and synergistic development with small and medium‑sized enterprises. Third, strengthening policy coordination between the China Securities Regulatory Commission and the State-owned Assets Supervision and Administration Commission of the State Council in areas such as standardizing and supporting science‑and‑technology financing for central enterprises, thus pooling efforts to channel financial resources toward the field of scientific and technological innovation.
Going forward, the China Securities Regulatory Commission and the State-owned Assets Supervision and Administration Commission will promptly refine and implement all relevant measures, fully leveraging the institutional and professional strengths of China’s modern capital market in driving technological innovation. By taking the technological innovation efforts of central enterprises as a leading example, they will stimulate innovation across the entire industrial chain—upstream, midstream, and downstream—and foster integrated development among large, medium, and small enterprises, thereby supporting the establishment of a new development paradigm and advancing high-quality development.
The Shenzhen Stock Exchange’s Technology Achievement and Intellectual Property Trading Center was officially inaugurated.
On November 8, 2022, the inaugural “Shenzhen Venture Capital Day” conference and the unveiling ceremony of the Shenzhen Stock Exchange’s Science and Technology Achievement and Intellectual Property Trading Center (hereinafter referred to as the “Science and Technology Trading Center”) were successfully held. Vice Chairman Fang Xinghai of the China Securities Regulatory Commission, Vice Minister Li Meng of the Ministry of Science and Technology, Deputy Director Lu Pengqi of the National Intellectual Property Administration, Director Xu Shan-chang of the Institutional Reform Department of the National Development and Reform Commission, and Hong Kong Financial Secretary Paul Chan, among other leaders, delivered remarks via video link. Meanwhile, Meng Fanli, Secretary of the Shenzhen Municipal Party Committee, and Chen Huaping, Chairman of the Shenzhen Stock Exchange, addressed the event in person and jointly unveiled the Science and Technology Trading Center. Leaders of Shenzhen, officials from the Shenzhen Stock Exchange, and representatives of market institutions attended the event on-site.
At the unveiling ceremony, the Science and Technology Exchange Center signed strategic cooperation agreements—both online and offline—with 16 inaugural partner institutions, including the Ministry of Science and Technology’s Science and Technology Assessment Center and the China Association for Science and Technology Evaluation and Achievement Management. These partners span government agencies, high-tech parks, universities and research institutes, technology transfer organizations, equity trading centers, commercial banks, and investment offices. On the same day, the Center also entered into technology‑transfer cooperation agreements with three universities and research institutes, while 15 specialized service providers—covering intellectual property management, financing appraisal, legal arbitration, and related fields—joined the Center. Meanwhile, the Center’s official website (www.szte.com) was officially launched. That day, the Center facilitated a total of eight technology transactions: four patent licensing deals, one assignment of an official invention, and three technology‑investment matchmaking arrangements, with a combined value of approximately RMB 76 million.
Business and Corporations
COMMERCIAL & CORPORATE
Hongjing Technology has been listed on the Shenzhen Stock Exchange.
Hongjing Technology (stock code: 301396) was listed on the ChiNext Board on November 11, 2022.
Hongjing Technology is issuing 22.8449 million shares in this public offering, all of which are new shares at an issue price of RMB 40.13 per share, raising RMB 917 million. Following the offering, the company’s total share capital will stand at 91.379493 million shares. Hongjing Technology primarily provides smart city solutions across sectors including smart healthcare, smart education, smart communities, smart buildings, smart government services, and smart industrial parks. In 2021, the company reported revenue of RMB 731 million and a net profit of RMB 88.144 million.
Notice on the Revision of the “Standard Format Template for Temporary Announcements of Companies Listed on the National Equities Exchange and Quotations System”
Share Transfer Office Document No. 80 [2022]
To all market participants:
To continuously enhance the quality of interim report information disclosure, facilitate market participants in preparing such reports in a standardized manner, and appropriately reduce information‑disclosure costs, the National Equities Exchange and Quotations Company has revised the “Format Template for Interim Announcements of Companies Listed on the National SME Share Transfer System” (hereinafter referred to as the “Interim Announcement Format Template”). The revised template is hereby released, and the relevant matters are notified as follows:
This revision adds 13 new temporary announcement templates, deletes one, and optimizes 41 existing templates in accordance with relevant business rules. In addition, it merges the textual and XBRL versions of the original templates into a single format and introduces special guidance on the preparation and disclosure of announcements. The revised “Temporary Announcement Format Templates” shall take effect as of November 14, 2022; all market participants are required to comply. The “Temporary Announcement Format Templates” issued by the National Equities Exchange and Quotations Company on March 29, 2022, are hereby repealed.
This is to notify you.
Notice on the Regulatory Oversight of New Third Board Listed Companies and Relevant Entities for October 2022
In October 2022, the National Equities Exchange and Quotations Company imposed disciplinary sanctions on four violations and adopted self-regulatory measures in respect of 60 violations. Among these, 55 violations were subject to verbal warnings and requests to submit written commitments, while 5 violations were subject to written self-regulatory measures. The specific details are as follows:
I. Disciplinary Actions
First, Guo Zhenqing, controlling shareholder, actual controller, chairman, and chief financial officer of Guangdong Tianfu Electric Co., Ltd. (hereinafter referred to as ST Tianfu), entered into “Equity Transfer (Nominee Holding) Agreements” with six individuals, under which he agreed to transfer a portion of his shares to these six persons, with the transferred shares held in nominee capacity on his behalf. The transaction involved 865,000 shares, representing 1.05% of the company’s total share capital. However, the company failed to disclose this nominee‑holding arrangement in a timely manner, thereby violating Articles 1.4 and 1.5 of the “Business Rules of the National Equities Exchange and Quotations System for Small and Medium‑Sized Enterprises (Trial)” (hereinafter referred to as the “Business Rules”), constituting a violation of information disclosure requirements. As the controlling shareholder, actual controller, chairman, and chief financial officer, Guo Zhenqing was aware of and participated in the nominee‑holding arrangement but failed to exercise due diligence. In accordance with relevant regulations, our company has imposed disciplinary sanctions in the form of a public reprimand on ST Tianfu and Guo Zhenqing.
Second, from October 2019 to December 2020, Li Hengyong, Chairman of Anhui Yiyuan Pharmaceutical Co., Ltd. (hereinafter referred to as “ST Yiyuan”), and Li Dawei, a director and board secretary of the company, held shares on behalf of 188 investors, totaling 5.986 million shares, or 7.39% of the company’s total share capital, with a combined value of RMB 55.643 million. The company failed to disclose this nominee‑holding arrangement in a timely manner. On December 29, 2021, Li Hengyong, Li Dawei, and two limited partnerships controlled by Li Dawei—Fuyuntang and Houdetang—engaged in trading ST Yiyuan shares, causing the combined shareholding ratio of these parties and their concerted actors to decline from 90.19% to 84.60%. Neither did they suspend trading nor accurately and fully disclose the relevant changes in equity interests when their aggregate holdings reached 90% and 85%, respectively, of the listed company’s outstanding shares. Furthermore, between December 2021 and January 2022, Li Hengyong, Li Dawei, and the aforementioned limited partnerships engaged in short‑term trading. In addition, as of April 30, 2022, ST Yiyuan had failed to prepare and disclose its 2021 annual report within the prescribed timeframe. These actions by ST Yiyuan violated Article 44 of the Securities Law of the People’s Republic of China, Article 13 of the Measures for the Administration of Acquisitions of Non‑Listed Public Companies, Article 1.4 of the Business Rules, and Articles 3 and 13 of the Information Disclosure Rules for Listed Companies on the National Equities Exchange and Quotations System (hereinafter referred to as the “Information Disclosure Rules”). In accordance with applicable regulations, our office has imposed a public reprimand as disciplinary action against ST Yiyuan and its Chairman, Li Hengyong, and issued a written criticism as disciplinary action against Director and Board Secretary Li Dawei.
Third, the annual reports of Beijing Lanshan Technology Co., Ltd. (hereinafter referred to as Lanshan Technology) for the years 2017, 2018, and 2019 contained false statements, and its public offering documents included materially false information, thereby violating Article 1.4 and Article 1.5 of the Business Rules, Article 3 of the Information Disclosure Rules, and Article 4 of the Provisional Rules on the Public Offering of Shares of the National Equities Exchange and Quotations System to Unspecified Qualified Investors and Listing on the Select Tier. As the de facto controllers of Lanshan Technology, Tan Shu and Zhao Ruimei organized and carried out the company’s unlawful information disclosure and fraudulent issuance activities, failing to exercise due diligence; accordingly, they are the directly responsible senior management personnel for these two violations. In accordance with relevant regulations, our company has issued a public reprimand against Tan Shu and Zhao Ruimei and imposed a disciplinary sanction barring them for life from serving as directors, supervisors, or senior management personnel of listed companies.
Fourth, Shenzhen Shenfa Redwood Co., Ltd. (hereinafter referred to as “ST Shenfa Red”) failed to prepare and disclose its 2021 annual report on time by April 30, 2022, thereby violating Articles 11 and 13 of the Information Disclosure Rules. In accordance with our company’s relevant regulations, disciplinary sanctions of public censure have been imposed on ST Shenfa Red and its Chairman, Cai Jindian.
II. Status of Imposing Written Self-Regulatory Measures
In October, the violations subject to written self-regulatory measures primarily fell into two categories: disclosure violations and corporate governance violations.
With respect to violations of information disclosure requirements, the primary issues involve listed companies’ failure to promptly disclose material information that is required to be disclosed, such as significant litigation or arbitration matters; information regarding the pledge or freezing of 5% or more of a listed company’s shares held by any shareholder; material transaction details; and changes to the company’s business scope or articles of association.
With respect to corporate governance violations, first, the listed company failed to promptly comply with the deliberation procedures and information disclosure obligations when providing external guarantees; second, it also failed to promptly comply with the deliberation procedures and information disclosure obligations in connection with related-party transactions.
The National Equities Exchange and Quotations Company, guided by the principles of “establishing sound systems, non-interference, and zero tolerance,” diligently fulfills its frontline regulatory duties, continuously strengthens self-regulatory oversight, and steadily enhances both the operational quality of the New Third Board market and the standardized practices of market participants. It resolutely imposes regulatory measures against violations, effectively safeguards investors’ legitimate rights and interests, and ensures the healthy and orderly development of the New Third Board market.
The Shanghai Stock Exchange and the Aviation Industry Corporation of China, Ltd. have signed a strategic cooperation agreement.
On November 3, the Shanghai Stock Exchange and the Aviation Industry Corporation of China, Ltd. (hereinafter referred to as AVIC) held a signing ceremony for a strategic cooperation agreement. Cai Jianchun, Deputy Secretary of the Party Committee and General Manager of the Shanghai Stock Exchange, and He Shengqiang, Member of the Party Leadership Group and Deputy General Manager of AVIC, witnessed the signing and attended a symposium. Liu Ti, Deputy General Manager of the Shanghai Stock Exchange, and Lu Guangshan, Secretary of the Board and Chief Engineer of AVIC, signed the strategic cooperation agreement on behalf of their respective organizations.
At the symposium, He Shengqiang, a member of the Party Leadership Group and Deputy General Manager of the Aviation Industry Corporation of China, stated that the corporation is a pillar enterprise of China’s aviation industry, providing advanced aerospace weapons and equipment for national defense and security, cutting-edge civil aviation systems for transportation, and high-end machinery and innovative solutions for advanced manufacturing. It is accelerating the development of a modern industrial system across four key dimensions: the real economy, technological innovation, modern finance, and human resources. In recent years, with the support of the Shanghai Stock Exchange, the Aviation Industry Corporation has actively leveraged the capital market to drive high-quality corporate growth, successfully completing major initiatives such as the listing of AVIC Unmanned Aircraft on the STAR Market. Looking ahead while building on the present, the corporation will take this signing as an opportunity to thoroughly implement the spirit of the 20th National Congress of the Communist Party of China, keep in mind the overarching interests of the nation, strengthen strategic cooperation with the Shanghai Stock Exchange, establish regular mechanisms, ensure tiered and phased information sharing, make full use of the capital market, promote specialized integration, and shape a new industrial landscape—thereby making vigorous contributions to providing robust support and solid guarantees for building a world-class military.
Cai Jianchun, Deputy Secretary of the Party Committee and General Manager of the Shanghai Stock Exchange, stated that the report to the 20th National Congress of the Communist Party of China emphasized that high-quality development is the primary task in building a modern socialist country in all respects. He noted the need to accelerate the implementation of the innovation-driven development strategy, strive for a higher level of scientific and technological self-reliance and strength, and promote the optimization of the layout and structural adjustment of the state-owned economy. The Shanghai Stock Exchange has earnestly implemented the decisions and arrangements of the CPC Central Committee, attached great importance to supporting the reform and innovation of state-owned enterprises, and leveraged the exchange’s functional strengths to provide comprehensive services across its entire product lineup. For a long time, the Shanghai Stock Exchange has maintained a solid cooperative relationship with the Aviation Industry Corporation of China, enjoying a broad foundation and ample room for collaboration. In this new era of historic opportunities, cooperation between the two sides has entered a new phase. Taking this signing as an opportunity, the Shanghai Stock Exchange will proactively offer equity and bond financing support, helping the listed companies under the Aviation Industry Corporation of China achieve high-quality development, enhance corporate governance, advance the group’s specialized integration, and contribute to realizing a high level of scientific and technological self-reliance and strength in the aviation industry, thereby making an even greater contribution to the comprehensive building of a modern socialist power.
Under the agreement between the two parties, the Shanghai Stock Exchange and the Aviation Industry Corporation of China will, guided by the principles of “complementary strengths and win-win cooperation” and committed to market‑oriented and law‑based approaches, engage in comprehensive collaboration across such areas as corporate equity financing, mergers and acquisitions, corporate bond and asset‑backed securities issuance, public REITs offerings, and innovative financial products. They will strengthen information exchange and sharing, jointly advance initiatives related to fostering companies for IPOs, enhancing the quality of listed companies, promoting specialized consolidation, conducting capital‑market training and exchanges, and undertaking joint research projects, thereby establishing a robust, long‑term cooperative framework.
All relevant departments of the Shanghai Stock Exchange and responsible personnel from the pertinent departments of the Aviation Industry Corporation attended the signing ceremony and symposium.
Taxation
TAXATION
The tax system is conducting a major discussion on “Tax Modernization Serving Chinese-style Modernization.”
Recently, the Party Committee Office of the State Taxation Administration issued the “Implementation Plan for Launching the Large-Scale Discussion on ‘Tax Modernization Serving Chinese‑Style Modernization,’” calling on the tax system to regard this discussion as a key initiative for studying, publicizing, and implementing the spirit of the 20th National Congress of the Communist Party of China, so as to better leverage the tax authorities’ functions in supporting Chinese‑style modernization.
The Plan emphasizes that launching the large-scale discussion on “Tax Modernization Serving Chinese‑style Modernization” is a concrete step for the tax system to earnestly study, publicize, and implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the spirit of the 20th National Congress of the Communist Party of China. It is also a powerful measure to further elevate the political awareness, innovate work approaches, and strengthen the sense of responsibility among tax authorities at all levels and the vast majority of tax officials. All units should take the organization of this major discussion as an opportunity to conduct in-depth study and reflection on the spirit of the 20th National Congress, ensuring a comprehensive and accurate understanding, thereby aligning their thinking and actions with the important speeches of General Secretary Xi Jinping and with the major decisions and deployments of the CPC Central Committee. In light of the realities of tax work, the discussion should guide tax officials at all levels—especially leading cadres—to integrate tax modernization into the theoretical and practical development of Chinese‑style modernization, encouraging them to think deeply, conduct active research, offer constructive suggestions, and jointly explore specific ideas, methods, and measures for leveraging tax modernization to support Chinese‑style modernization.
The Plan, centered on the theme of “Tax Modernization Serving Chinese‑style Modernization,” raises six key questions: “How can we, in light of the tax authorities’ duties and mission, effectively implement the tax‑related policies and arrangements adopted at the 20th National Congress of the Communist Party of China?” “How can we integrate tax modernization into the overarching framework of the 20th National Congress’s vision for Chinese‑style modernization, conducting systematic research and strategic planning?” and “How can we further expand and deepen the priority tasks and measures under the ‘Six Major Systems’ of tax modernization?” It calls on all units within the tax system to focus on these issues, ground their work in practical realities, and organize a wide range of activities—such as thematic study sessions, seminars and exchanges, research symposiums, essay contests, and theoretical studies—to continuously deepen understanding of the spirit of the 20th National Congress and ensure that implementation measures are both well‑conceived and effectively carried out.
The Plan requires that tax authorities at all levels integrate the extensive discussion with efforts to strengthen the building of political institutions, with the in-depth implementation of rectifications following central inspection tours, and with the sustained and institutionalized advancement of Party history study and education. It calls for robust organizational leadership, rigorous accountability, continuous monitoring and evaluation, and proactive publicity and guidance, so as to produce a set of theoretical, institutional, and practical outcomes. The aim is to ensure that the process of this extensive discussion serves to invigorate the spirit of dedication and innovation among tax officials, drives comprehensive improvements in the quality and efficiency of tax work, and yields tangible results. Guided by the spirit of the 20th National Congress of the Communist Party of China, we will plan and implement tax modernization in a thorough and pragmatic manner, contributing the strength of the tax sector to the all‑round building of a modern socialist country and to the great rejuvenation of the Chinese nation.
Announcement of the Ministry of Finance and the State Taxation Administration on Personal Income Tax Policies Related to Individual Pension Schemes
Announcement No. 34 of 2022 by the Ministry of Finance and the State Taxation Administration
In order to implement the requirements set forth in the “Opinions of the General Office of the State Council on Promoting the Development of Individual Pension Schemes” (Guobanfa [2022] No. 7), the following announcement is hereby made regarding the individual income tax policies pertaining to individual pensions:
I. Effective January 1, 2022, a deferred tax preferential policy will be implemented for individual pensions. At the contribution stage, contributions made by individuals to their individual pension accounts may be deducted on an actual basis from either comprehensive income or business income, up to a limit of RMB 12,000 per year. At the investment stage, investment income credited to the individual pension account will be temporarily exempt from personal income tax. At the withdrawal stage, amounts withdrawn from individual pensions will not be included in comprehensive income; instead, they will be taxed separately at a rate of 3%, with the tax paid being recorded under the “Wages and Salaries Income” category.
II. When an individual claims a pre‑tax deduction for personal pension contributions, the deduction certificate issued by the Personal Pension Information Management Service Platform shall serve as the tax‑deduction supporting document. For income from wages and salaries, or from labor services subject to the cumulative withholding method for provisional individual income tax, the individual may elect to claim the contribution either during the current year’s withholding and provisional payment, or in the following year’s final tax settlement, up to the applicable limit. If opting for current‑year withholding, the relevant documentation must be promptly provided to the withholding agent. The withholding agent shall, in accordance with the requirements set forth in this announcement, process the pre‑tax deduction on behalf of the taxpayer. For other types of income—such as remuneration for services, manuscript fees, royalties, or business income—the corresponding contributions may be deducted on an actual‑expense basis within the prescribed limit during the following year’s final tax settlement. Upon receiving personal pension benefits in accordance with the regulations, the commercial bank in the city where the personal pension fund account was opened shall withhold and remit the applicable individual income tax on behalf of the recipient.
III. The human resources and social security authorities and the tax authorities shall establish an information‑exchange mechanism, transmitting individual pension‑related tax information to the tax authorities via the Individual Pension Information Management Service Platform, and shall cooperate with the tax authorities in carrying out relevant tax collection and administration tasks.
IV. Relevant branches of commercial banks shall promptly submit detailed, full‑amount, and individualized reports on the tax‑paying status of all taxpayers who have opened personal pension fund accounts with the bank, ensuring that the information is truthful and accurate.
V. Fiscal, human resources and social security, tax, and financial regulatory authorities at all levels shall coordinate closely and ensure diligent implementation. Any difficulties or issues encountered in the course of implementing this announcement shall be promptly reported to the competent higher-level authorities.
VI. The tax policies stipulated in this announcement shall be implemented, effective January 1, 2022, in the pilot cities for the individual pension scheme.
The list of pilot cities for the individual pension scheme will be separately announced by the Ministry of Human Resources and Social Security in coordination with the Ministry of Finance and the State Taxation Administration. Regions that have already launched pilot programs for individually funded, tax-deferred commercial pension insurance—such as Shanghai, Fujian Province, and the Suzhou Industrial Park—shall, effective January 1, 2022, uniformly implement the tax policies stipulated in this announcement.
This is hereby announced.
Ministry of Finance, State Taxation Administration
November 3, 2022
Announcement of the State Taxation Administration on Matters Related to the Administration and Collection of the Individual Income Tax Policy Supporting Residents in Trading Up to New Homes
State Taxation Administration Announcement No. 21 of 2022
To support residents in improving their housing conditions, in accordance with the “Announcement of the Ministry of Finance and the State Taxation Administration on Relevant Individual Income Tax Policies Supporting Residents’ Home‑Exchange Purchases” (No. 30 of 2022), the following administrative matters are hereby announced:
I. From October 1, 2022, to December 31, 2023, taxpayers who sell their own residential property and, within one year of the sale, purchase another residential property in the same city may, in accordance with applicable regulations, apply for a refund of the personal income tax already paid on the sale of their existing home.
The formula for calculating the personal income tax refund amount for taxpayers purchasing a new home in exchange for an existing one is:
If the purchase price of the new home is equal to or greater than the transfer price of the existing home, the tax refund shall be equal to the individual income tax paid upon the transfer of the existing home.
If the purchase price of the new home is less than the sale price of the existing home, the tax refund shall be calculated as follows: (Purchase price of the new home ÷ Sale price of the existing home) × the individual income tax paid upon the sale of the existing home.
Where the transfer price of the existing residence and the purchase price of the new residence differ from the assessed taxable value, the assessed taxable value shall prevail.
Both the transfer price of the existing home and the purchase price of the new home are exclusive of value-added tax.
II. Where a jointly owned residential property is sold, or where a newly purchased residential property is held in joint ownership, the amount of the transfer of the taxpayer’s existing residence or the purchase price of the newly acquired residence shall be determined in accordance with the taxpayer’s respective share of ownership.
III. The time of the sale of the existing residence shall be determined by the date on which the taxpayer has paid the individual income tax upon such sale. For newly purchased housing that is a second-hand property, the purchase date shall be the date of payment of the deed tax or the registration date as recorded on the real estate ownership certificate; for newly purchased housing that is a new property, the purchase date shall be the date on which the housing transaction contract was filed with the housing and urban–rural development authority.
IV. When applying to avail themselves of the personal income tax refund policy for residents exchanging housing, taxpayers shall, in accordance with the law, pay the personal income tax incurred upon the transfer of their existing residence and complete the registration of the change in real estate ownership; if the newly purchased residence is a second-hand property, they shall, in accordance with the law, pay the deed tax and complete the registration of the change in real estate ownership; if the newly purchased residence is a new property, they shall, as required by the local housing and urban–rural development authorities, file the housing transaction contract for record.
V. Where a taxpayer is eligible for the personal income tax refund policy for residents exchanging housing, they shall submit an application to the tax authority that collected the personal income tax on the transfer of the existing residence, complete the “Application Form for Personal Income Tax Refund on Resident Housing Exchange” (see attachment), and provide the following documents:
(1) Taxpayer’s identification document;
(2) The housing transaction contract for the current residence;
(3) If the newly purchased housing is a second-hand property, submit the house transaction contract, the real estate ownership certificate, and their photocopies.
(4) If the newly purchased housing is a new property, submit the housing transaction contract that has been filed (online signed) with the housing and urban–rural development authority, along with a copy thereof.
Relying on the tax payment records for both the taxpayer’s existing home and the newly purchased home, the tax authority provides pre‑filled application forms and retains copies of the real estate ownership certificate and the sales contract for the new property. After reviewing and conofficeing the application form, the taxpayer submits the tax refund application.
VI. Tax authorities shall conduct tax refund reviews by utilizing information shared by the housing and urban–rural development authorities, including records of housing transaction contracts. Where the review determines that the conditions for a tax refund are met, the refund shall be processed in accordance with applicable regulations; where the review finds that the conditions are not met, no refund shall be granted in accordance with the law.
VII. If, due to the termination, cancellation, or invalidation of a housing transaction contract for a newly purchased residence, a taxpayer no longer meets the eligibility requirements for the tax refund, the taxpayer shall, within the 15th day of the month following such event, proactively remit the previously refunded tax amount to the competent tax authority.
Where a taxpayer falls under the circumstances set forth in paragraph 1 of this Article but fails to remit the refunded tax as required, or where a taxpayer obtains a tax refund by fraud in violation of the conditions stipulated in this Announcement, the tax authorities shall handle such cases in accordance with the relevant provisions of the Law of the People’s Republic of China on the Administration of Tax Collection and its Implementing Rules.
VIII. Tax authorities at all levels shall carry out publicity and guidance, strengthen policy interpretation and taxpayer assistance, continuously streamline processing procedures, issue timely reminders and alerts, and facilitate taxpayers’ access to tax incentives.
9. The validity period of this announcement is from October 1, 2022, to December 31, 2023.
This is hereby announced.
Litigation and Arbitration
LITIGATION & ARBITRATION
Summary of Regulations to Be Implemented in November 2022
I. Administrative Regulations
1. Regulations on Promoting the Development of Individual Industrial and Commercial Households
Order No. 755 of the State Council of the People’s Republic of China / Currently in force / Issued on October 1, 2022 / Effective November 1, 2022
II. Departmental Regulations
Order No. 61 of the State Administration for Market Regulation / Currently in force / Issued on September 29, 2022 / Effective November 1, 2022
2. Regulations on the Administration of Motor Vehicle Driver Training (2022)
Order No. 32 of 2022 of the Ministry of Transport of the People’s Republic of China / Currently in force / Issued on September 26, 2022 / Effective November 1, 2022
3. Measures for the Administration of Food Safety Sampling and Inspection (Revised in 2022)
Order No. 61 of the State Administration for Market Regulation / Currently in force / Issued on September 29, 2022 / Effective November 1, 2022
4. Measures for the Administration of Organic Product Certification (Revised in 2022)
Order No. 61 of the State Administration for Market Regulation / Currently in force / Issued on September 29, 2022 / Effective November 1, 2022
Order No. 61 of the State Administration for Market Regulation / Currently in force / Issued on September 29, 2022 / Effective November 1, 2022
III. Local Regulations
1. Regulations on Foreign Investment in the Shenzhen Special Economic Zone
Notice No. 66 of the Standing Committee of the Seventh Shenzhen Municipal People’s Congress / Currently in Force / Issued on September 5, 2022 / Effective November 1, 2022
Announcement No. 129 of the Standing Committee of the Gansu Provincial People’s Congress / Currently in Force / Issued on July 29, 2022 / Effective November 1, 2022
3. Regulations of Liaoning Province on Urban Heating (Revised in 2022)
Announcement No. 106 of the Standing Committee of the People’s Congress of Liaoning Province (13th Term) / Currently in Force / Issued on September 21, 2022 / Effective November 1, 2022
4. Regulations of Tianjin Municipality on the Prevention of Juvenile Delinquency (Revised in 2022)
Announcement No. 110 of the Standing Committee of the Tianjin Municipal People’s Congress / Currently in force / Issued on September 27, 2022 / Effective November 1, 2022
5. Regulations of Shanghai Municipality on Operational Support for Government Agencies
Notice No. 129 of the Standing Committee of the Shanghai Municipal People’s Congress (15th Term) / Currently in Force / Issued on September 22, 2022 / Effective November 1, 2022
IV. Local Government Regulations
Order No. 335 of the Hangzhou Municipal People’s Government / Currently in force / Issued on September 16, 2022 / Effective November 1, 2022
2. Regulations on the Management of Domestic Waste Sorting in Dongguan City (Revised in 2022)
Order No. 161 of the People’s Government of Dongguan Municipality / Currently in force / Issued on September 26, 2022 / Effective November 1, 2022
3. Provisional Measures for the Administration of Express Delivery in Hebi City
Order No. 9 of the People’s Government of Hebi City / Currently in force / Issued on August 10, 2022 / Effective November 1, 2022
4. Measures for the Administration of Franchising in Municipal Public Utilities of Hefei City
Order No. 218 of the People’s Government of Hefei Municipality / Currently in force / Issued on September 9, 2022 / Effective November 1, 2022
5. Measures for the Administration of Online Food Delivery Services in Hefei City
Order No. 216 of the People’s Government of Hefei Municipality / Currently in force / Promulgated on September 9, 2022 / Effective November 1, 2022
V. Industry Regulations
Notice No. 4 of 2022 of the China Construction Enterprise Management Association / Currently in force / Issued on October 24, 2022 / Effective November 1, 2022
Not yet in effect / Published on October 28, 2022 / Effective November 7, 2022
Not yet in effect / Published on August 5, 2022 / Effective November 5, 2022
The Supreme People’s Court has issued guidelines to refine the allocation of powers and responsibilities among collegial panels and to improve the mechanisms governing their operation.
To thoroughly study and implement the spirit of the 20th National Congress of the Communist Party of China, fully and accurately enforce the judicial accountability system, further refine the allocation of powers and responsibilities among collegial panels, and standardize the operational mechanisms of such panels, the Supreme People’s Court recently issued the “Opinions of the Supreme People’s Court on Standardizing the Operational Mechanisms of Collegial Panels” (hereinafter referred to as the “Opinions”).
The “Opinions” follow the central government’s decisions and arrangements for deepening reform of the mechanisms governing the exercise of law enforcement and judicial powers. Drawing on recent developments and new requirements in the implementation of the judicial accountability system, and grounded in the actual conditions of trial work at courts across the country, they further refine the composition mechanism of collegial panels, improve the duties of panel members, the rules for deliberation, and the procedures for drafting judicial documents, and establish norms addressing key issues such as the coordination between panel operations and the supervisory and managerial responsibilities of court presidents, as well as the linkage with the oversight and management mechanisms for the “four categories of cases.” The “Opinions” emphasize seamless integration and coordinated alignment with previously issued reform documents from the Supreme People’s Court—covering specialized judges’ conferences, adjudication committees, lists of judicial powers and responsibilities, unified application of law, and oversight and management of the “four categories of cases”—thereby completing the institutional framework of the judicial accountability reform.
According to reports, the Supreme People’s Court will, in the next phase, focus on implementing the “Opinions” and related reform measures, comprehensively coordinate related initiatives, ensure the precise execution of reforms, and maximize their overall effectiveness.
Opinions of the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Education on Implementing the System of Professional Disqualification
Supreme People’s Court, Supreme People’s Procuratorate, Ministry of Education
Fa Fa [2022] No. 32
Notice of the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Education on the Issuance of the “Opinions on Implementing the System of Professional Disqualification”
To the Higher People’s Courts, People’s Procuratorates, and Education Departments (Education Commissions) of all provinces, autonomous regions, and municipalities directly under the central government; to the Military Court and Military Procuratorate of the People’s Liberation Army; and to the Production and Construction Corps Branch of the Higher People’s Court of the Xinjiang Uygur Autonomous Region, the People’s Procuratorate of the Xinjiang Production and Construction Corps, and its Education Bureau:
In order to strictly enforce the system of occupational prohibitions for offenders, purify the campus environment, and protect minors, and in accordance with the Criminal Law, the Law on the Protection of Minors, the Teachers’ Law, and other relevant legal provisions, and drawing on insights from law enforcement and judicial practice, the Supreme People’s Court, together with the Supreme People’s Procuratorate and the Ministry of Education, has formulated the “Opinions on Implementing the Occupational Prohibition System.” These opinions are hereby issued; please implement them conscientiously in light of actual conditions. Should any issues arise during implementation, please promptly report them separately to the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Education.
Supreme People’s Court Supreme People’s Procuratorate
Ministry of Education
November 10, 2022
Opinions of the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Education on Implementing the System of Professional Disqualification
In order to implement the system for querying criminal and unlawful records of faculty and staff at schools, kindergartens, and other educational institutions, as well as off-campus training organizations; to strictly enforce the prohibition on employment of individuals with criminal records; to purify the campus environment; and to effectively protect minors, in accordance with the provisions of the Criminal Law of the People’s Republic of China (hereinafter referred to as the “Criminal Law”), the Law of the People’s Republic of China on the Protection of Minors (hereinafter referred to as the “Law on the Protection of Minors”), the Teachers’ Law of the People’s Republic of China (hereinafter referred to as the “Teachers’ Law”), and other relevant laws, the following opinions are hereby put forward:
I. In accordance with Article 37‑1 of the Criminal Law, if a teaching or administrative staff member commits a crime by taking advantage of their professional position, or commits a crime involving a specific duty that contravenes professional obligations, and is sentenced to criminal punishment, the people’s court may, based on the circumstances of the crime and the need to prevent recidivism, prohibit such person from engaging in the relevant profession for a specified period. Where other laws or administrative regulations provide for additional prohibitions or restrictions on engaging in the relevant profession, those provisions shall prevail.
The Law on the Protection of Minors and the Teachers’ Law fall under the category of laws specified in the preceding paragraph, while the Regulations on Teacher Qualification fall under the category of administrative regulations specified in the preceding paragraph.
II. In accordance with Article 62 of the Law on the Protection of Minors, individuals who have committed offenses such as sexual assault, abuse, trafficking, or violent harm shall be prohibited from engaging in any work that involves close contact with minors.
In accordance with Article 14 of the Teachers’ Law and Article 18 of the Regulations on Teacher Qualification, any person who has been deprived of political rights or sentenced to a term of imprisonment of one year or more for an intentional crime shall be ineligible to obtain teacher qualification; if such a person has already obtained teacher qualification, that qualification shall be revoked, and he or she shall be prohibited from reobtaining it.
III. Where faculty and staff commit crimes such as sexual assault, abuse, human trafficking, or violent harm, the people’s courts shall, in accordance with Article 62 of the Law on the Protection of Minors, issue a judgment prohibiting them from engaging in any work involving close contact with minors.
If faculty and staff commit crimes other than those specified in the preceding paragraph, the people’s court may, in light of the nature of the offense and the need to prevent recidivism, pursuant to Article 37‑1, Paragraph 1 of the Criminal Law, impose a prohibition on engaging in related professions for a period of three to five years, commencing from the date of completion of the sentence or from the date of parole; alternatively, it may issue a restraining order in accordance with Article 38, Paragraph 2, and Article 72, Paragraph 2 of the Criminal Law.
IV. Where it is necessary to prohibit educators and other school staff from engaging in relevant occupations or to impose a prohibition order, the People’s Procuratorate shall, when instituting public prosecution, submit corresponding recommendations.
V. In criminal cases involving offenses committed by faculty and staff, upon the judgment becoming final, the people’s court shall, within thirty days, serve the judgment document on the education administrative department at the defendant’s place of employment; where necessary, the education administrative department shall forward the judgment document to the relevant competent authorities.
Where, for reasons such as the protection of minors’ privacy, it is inappropriate to serve the judgment, relevant supporting documents specifying the defendant’s personal details, the charges, and the sentence may be served instead.
VI. Where faculty and staff members commit crimes, upon the entry into force of the judgment rendered by the people’s court, their employing unit, the education administrative department, or the relevant competent authority may, in accordance with the Law on the Protection of Minors, the Teachers’ Law, the Regulations on Teacher Qualification, and other applicable laws and regulations, impose appropriate measures, disciplinary actions, and penalties.
Where a person falls under any of the circumstances entitling to loss or revocation of teacher qualification, the education administrative department shall promptly confiscate the relevant teacher qualification certificate.
VII. The People’s Procuratorate shall supervise the implementation of occupational prohibitions and restraining orders.
VIII. When the people’s courts or the people’s procuratorates discover that a relevant entity has failed to implement the criminal record‑checking system or the occupational prohibition system, they shall submit recommendations to that entity.
9. For the purposes of these Opinions, “school and kindergarten staff” refers to teachers, educational and teaching support personnel, administrative staff, general service personnel, security personnel employed by schools, kindergartens, and other educational institutions, as well as relevant personnel working at off-campus training institutions.
The provisions of these Opinions shall apply by analogy to the offenses committed by the sponsors or de facto controllers of educational institutions, such as schools and kindergartens, as well as off-campus training institutions.
X. These Opinions shall take effect as of November 15, 2022.
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