JC Master Legal News Issue 1171

Key Takeaways for This Issue

The China Securities Regulatory Commission is soliciting public comments on the “Corporate Governance Guidelines for Listed Companies (Revised Draft for Comments).”
Recently, the China Securities Regulatory Commission issued a notice soliciting public comments on the “Code of Corporate Governance for Listed Companies (Revised Draft for Public Consultation).”
The Hong Kong Monetary Authority has issued the “Regulatory Guidelines for Licensed Stablecoin Issuers.”
On July 29, the Hong Kong Monetary Authority issued accompanying implementation guidelines for the regulatory regime governing stablecoin issuers, which will take effect on August 1, 2025. These include the “Regulatory Guidelines for Licensed Stablecoin Issuers” and the “Guidelines on Anti-Money Laundering and Counter-Terrorist Financing (Applicable to Licensed Stablecoin Issuers).”
State Taxation Administration: Over 360 cases of tax evasion by online streamers have been investigated and prosecuted, with additional taxes assessed totaling more than RMB 3 billion.
On July 28, the State Council Information Office held a series of thematic press conferences on the high-quality implementation of the 14th Five-Year Plan, providing an overview of tax reform and development during the period.
The State Taxation Administration has issued a document clarifying matters related to the tax credit policy for overseas investors who reinvest their distributed profits.
The State Taxation Administration recently issued the “Announcement on Matters Relating to the Tax Credit Policy for Foreign Investors’ Direct Investment with Distributed Profits,” which will take effect on January 1, 2025.

Finance & Capital Markets
The China Securities Regulatory Commission is soliciting public comments on the “Corporate Governance Guidelines for Listed Companies (Revised Draft for Comments).”
Recently, the China Securities Regulatory Commission issued a notice soliciting public comments on the “Code of Corporate Governance for Listed Companies (Revised Draft for Public Consultation).”
This revision focuses on the following key areas: First, it refines the regulatory framework for directors and senior management by establishing comprehensive standards governing their appointment, performance of duties, and departure, thereby ensuring that they faithfully and diligently fulfill their responsibilities. Second, it strengthens the incentive and constraint mechanisms for directors and senior executives by requiring listed companies to adopt remuneration policies that align executive compensation with both corporate and individual performance, thus fostering a stronger alignment of interests between management and the company. Third, it regulates the conduct of controlling shareholders and actual controllers by imposing strict limits on intra‑industry competition that could materially harm the listed company and further enhancing the review procedures and decision‑making requirements for related-party transactions. Fourth, it ensures seamless coordination with other relevant regulations.
The Hong Kong Monetary Authority has issued the “Regulatory Guidelines for Licensed Stablecoin Issuers.”
On July 29, the Hong Kong Monetary Authority issued accompanying implementation guidelines for the regulatory regime governing stablecoin issuers, which will take effect on August 1, 2025. These include the “Regulatory Guidelines for Licensed Stablecoin Issuers” and the “Guidelines on Anti-Money Laundering and Counter-Terrorist Financing (Applicable to Licensed Stablecoin Issuers).”
The “Regulatory Guidelines for Licensed Stablecoin Issuers” define statutory stablecoins and set out the financial requirements, personnel qualifications, reserve asset holdings, risk management framework, and supervisory obligations for license applications. The Hong Kong Monetary Authority stated that the licensing process will be ongoing; institutions that deem themselves fully prepared and wish to seek early consideration should submit their applications to the HKMA on or before Tuesday, September 30, 2025.

Commercial & Corporate
The Ministry of Commerce plans to issue the foreign economic and trade industry standard “Digital Trade: Global Enterprise Identity Identification Coding Rules.”
Recently, the Ministry of Commerce issued the “Public Consultation on the Industry Standard ‘Digital Trade: Global Enterprise Identification Coding Rules,’” with a deadline for submitting feedback set for August 22, 2025.
The draft for public comment primarily addresses the structure and application of the Global Enterprise Identification Code (GID). The GID consists of 14 digits: the first three digits represent the country code, followed by a 10-digit entity identifier, and ending with a check digit. This coding system is designed to address the challenge of enterprise identification in global digital trade and to facilitate the seamless conduct of cross-border digital commerce.
The Ministry of Natural Resources has released a list of enterprise-related fees.
Recently, the Ministry of Natural Resources released the “Catalogue of Comprehensive Enterprise-Related Fees Levied by the Ministry of Natural Resources and Its Subordinate Units.”
The list provides a detailed breakdown of the fee items charged by the Ministry of Natural Resources and its subordinate agencies, including real estate registration fees, deposits for mineral rights transfer transactions, and technical service fees. These fees are determined either through market‑based pricing or by mutual agreement between the parties, covering a range of areas such as technical consulting, construction quality assurance deposits, and performance bonds for government procurement.

Taxation TAXATATION
State Taxation Administration: Over 360 cases of tax evasion by online streamers have been investigated and prosecuted, with additional taxes assessed totaling more than RMB 3 billion.
On July 28, the State Council Information Office held a series of thematic press conferences on the high-quality implementation of the 14th Five-Year Plan, providing an overview of tax reform and development during the period.
At the meeting, Wang Daoshu, Deputy Director of the State Taxation Administration, stated that, in cracking down on tax violations, authorities have focused on key individuals and, in accordance with the law, investigated and prosecuted a number of high-income taxpayers—including online streamers and celebrity artists—for tax evasion. Since 2021, more than 360 cases involving online streamers evading taxes have been uncovered, resulting in additional tax assessments totaling over RMB 3 billion. To promote compliance, these A‑level taxpayers have received incentives and support through coordinated efforts involving 29 government departments. In terms of standardizing enforcement, authorities strive to address most medium- and low‑risk tax issues prior to or during the filing process, thereby minimizing unnecessary disruptions to businesses.
In addition, Cai Zili, Deputy Director of the State Taxation Administration, stated that, based on the recently concluded individual income tax final settlement for this year, more than 100 million taxpayers legally applied for tax refunds totaling over RMB 130 billion, while over 7 million taxpayers voluntarily filed supplementary tax returns, paying an additional RMB 48 billion. On the other hand, China’s personal income tax threshold is relatively high; for instance, the annual basic deduction standard of RMB 60,000 accounts for approximately 62.7% of the country’s per capita GDP in 2024. Internationally, this ratio typically stands below 40% in developed economies.
The State Taxation Administration has issued a document clarifying matters related to the tax credit policy for overseas investors who reinvest their distributed profits.
The State Taxation Administration recently issued the “Announcement on Matters Relating to the Tax Credit Policy for Foreign Investors’ Direct Investment with Distributed Profits,” which will take effect on January 1, 2025.
It specifies that, when overseas investors reinvest, the tax credit amount shall be calculated according to one of the following two scenarios: First, eligible enterprises may, upon determining the tax credit amount, choose to calculate it either at 10% of the reinvestment amount or at a dividend tax rate lower than 10%, as prescribed by the applicable tax treaty (or arrangement). Once such a rate is selected, it may not be replaced by the lower dividend tax rate stipulated in the tax treaty (or arrangement) when the investment is subsequently repatriated. Second, if the same overseas investor has multiple eligible domestic reinvestments, the tax credit amounts shall be aggregated separately for each enterprise distributing profits.

LITIGATION & ARBITRATION
The Supreme People’s Court has released typical cases, imposing severe penalties on those who assist in cybercrime activities.
On July 28, the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security jointly held a press conference to release the “Opinions on Handling Criminal Cases Involving Assistance in Cybercrime Activities” and to publicize relevant typical cases, emphasizing the need to crack down, in accordance with the law, on those who assist in cybercriminal activities.
The Supreme People’s Court has released seven typical cases, focusing on cracking down on organized, professional, technologically sophisticated, and covert activities that facilitate cybercrime. The cases involve providing technical support, illegally trading phone cards, using GOIP devices, laundering money through virtual currencies, and other such conduct, with multiple defendants implicated. In addressing the upstream and downstream links of telecom and online fraud, the courts have imposed strict penalties in accordance with the law, particularly targeting unlawful acts by insiders within the industry. Furthermore, the Supreme People’s Court has advocated a criminal policy that balances leniency and severity for offenses committed by minors, students, and other vulnerable groups, thereby promoting comprehensive governance.
The Supreme People’s Procuratorate and three other departments have released the fourth batch of typical cases involving family education guidance in juvenile-related matters.
On July 28, the Supreme People’s Procuratorate, the Office of the State Council Working Committee on Women and Children, the All-China Women’s Federation, and the China Care for the Next Generation Working Committee jointly released the fourth batch of typical cases involving family education guidance in juvenile-related matters, with the aim of further strengthening family education guidance for minors involved in legal proceedings.
The six typical cases released this time cover areas such as juvenile delinquency prevention and family education guidance, underscoring the importance of parental guardianship and educational support. They address issues including the rehabilitation of adolescents with internet addiction, the effective implementation of guardianship responsibilities, and the resolution of challenges in restructured family education. The cases also distill innovative practices in family education guidance, promote institutionalization, and enhance the overall quality of family education counseling services.
The Supreme People’s Court has released typical cases of hierarchical jurisdiction for 2024.
On July 29, the Supreme People’s Court released “Selected Cases of Judicial Reform by the People’s Courts (No. 14)” along with typical cases of hierarchical jurisdiction for 2024, aiming to promote the uniform application of the law and prevent local protectionism.
The cases released this time comprise four representative instances, highlighting the role of the hierarchical jurisdiction system in efficiently resolving disputes, clarifying adjudicatory rules for emerging types of cases, preventing local protectionism in accordance with the law, and ensuring the proper application of international treaties. Specifically, Lishui City in Zhejiang Province resolved a series of trademark‑infringement cases through hierarchical jurisdiction; Leshan City in Sichuan Province handled novel virtual‑currency‑related criminal cases under the same mechanism; Jinhua City in Zhejiang safeguarded the equal compensation rights of “married‑out daughters” by conducting higher‑level trials; and Xiamen in Fujian clarified the applicable procedures for the Montreal Convention in international air transport contracts.
The Supreme People’s Court focuses on protecting the rights and interests of private enterprises and releases the 26th batch of selected Q&A.
On July 31, the Supreme People’s Court released “Selected Q&A from the Legal Answer Network (Batch No. 26) — Special Issue on the Protection of Private Enterprises.”
This round of Q&A clarifies three key points: First, payment agreements between large construction groups and small- and medium-sized material suppliers are invalid, and the court should reasonably determine the payment deadline; second, a minority shareholder’s request to inspect the company’s accounting books requires the company to prove the existence of an “improper purpose”; otherwise, the court should grant access; third, in bankruptcy reorganization proceedings involving micro and small enterprises, shareholders’ equity may be appropriately preserved to facilitate the enterprise’s rescue, provided that such preservation is approved by the creditors’ meeting and the allocation of equity shares is determined in accordance with each shareholder’s contribution.
The Supreme People’s Court has released typical cases on safeguarding the legitimate rights and interests of private enterprises.
On July 31, the Supreme People’s Court released 12 typical cases demonstrating how people’s courts have, in accordance with the law, provided equal protection for the legitimate rights and interests of private enterprises and entrepreneurs.
The cases released this time address the lawful punishment of corruption within private enterprises, the strict distinction between criminal and non-criminal conduct, the comprehensive implementation of the principle of equal protection under the law, the safeguarding of researchers’ innovation, and the protection of private enterprises’ legitimate rights and interests in international operations. These cases underscore the protection of the lawful rights and interests of private enterprises and their entrepreneurs—for example, by ordering state-owned enterprises to pay liquidated damages in contract disputes and declaring “back-to-back” clauses invalid to protect the rights of small and medium-sized enterprises; and in intellectual property disputes, by explicitly recognizing that domain names, as prior civil rights under trademark law, are entitled to protection.
The Supreme People’s Court has issued a reply clarifying the legal application in cases involving patentability assessment reports.
On July 30, the Supreme People’s Court issued the “Reply on Legal Issues Concerning the Adjudication of Cases Involving Patent Right Evaluation Reports,” which will take effect on August 1, 2025.
The reply clarifies that the patent‑right evaluation report issued by the State Council’s patent administrative department constitutes evidence in court proceedings involving patent infringement. If the report concludes that the patent at issue does not meet the grant conditions prescribed by the Patent Law, the court may not dismiss the lawsuit solely on that basis; it must, in light of the specific facts of the case, provide appropriate explanations and render a judgment in accordance with the law.
The Supreme People’s Court has issued Interpretation (II) on the Application of Law in Labor Dispute Cases.
On August 1, the Supreme People’s Court held a press conference to release the “Interpretation (II) of the Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Labor Dispute Cases,” along with several typical cases. The Interpretation will take effect on September 1, 2025.
Interpretation No. 2 clarifies the legal standards applicable to matters such as the conclusion of labor contracts, non-compete restrictions, and the payment of social insurance contributions. It stipulates that, after an employer has consecutively entered into two fixed-term labor contracts, it may not refuse to conclude an open-ended labor contract without just cause; non‑compete clauses must be proportionate to the trade secrets to which the employee has access, and any portion exceeding such proportion shall be invalid; if an employer fails to pay social insurance contributions in accordance with the law, the employee may terminate the contract and claim economic compensation; and where a written labor contract is not concluded due to reasons not attributable to the employer, no double wages are payable.

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