l Latest Headine
China (Shanghai) Pilot Free Trade Zone Lin-gang Special Area: One third of the policy-making tasks has been completed
l New Law Express
General Administration of Customs, P.R. China has promulgated Announcement of the General Administration of Customs on Matters Concerning the Handling of Voluntary Disclosure of Tax-related Violations
The upgraded China-Singapore Free Trade Agreement takes effect
China Securities Regulatory Commission revised Administrative Measures on Significant Asset Restructuring of Listed Companies, allowing high-tech industries to be listed on the GEM
l Our Firm’s Trends
Veritas Law Corporation represented an electronic trading company in Shanghai in the case of a dispute over a sale contract with an electronic technology company in Shanghai and won in the first instance.
He Lijuan, partner of Veritas, was invited to participate in the seminar on overseas investment of Chinese companies
【Latest Headline】
China (Shanghai) Pilot Free Trade Zone Lin-gang Special Area: One third of the policy-making tasks has been completed
Wu Wei, the full-time deputy director of the Management Committee of the China (Shanghai) Pilot Free Trade Zone Lin-gang Special Area, revealed at the 2019 Lingang Special Area Investment Promotion Meeting that at present, one-third of the policy-making tasks in the new area have been completed. The new area will achieve the goal of building a special economic function zone and a modern new city through a series of institutional innovations in the near future.
In August this year, the China (Shanghai) Pilot Free Trade Zone Lin-gang Special Area was officially unveiled. According to the Overall Plan for the China (Shanghai) Pilot Free Trade Zone Lin-gang Special Area (hereinafter referred to as the “Overall Plan”) issued by the State Council, the establishment of the new area aims to create a special economic function zone with global influence and competitiveness, active service and integration into major national strategies to better serve the overall opening-up strategy.
According to Wu Wei, 78 tasks in the Overall Plan, 80 tasks in the Special Support Policy will automatically subject to 13 policies in the Suggestions on Supporting the Reform and Opening-up of Pudong New Area to Embark on A New Journey of High-quality Development in the New Era and 6 industry support policies clearly defined by the Management Committee. There is a total of 177 tasks. Currently, one third of the tasks has been completed.
In accelerating the development of frontier industrial clusters, Lin-gang Special Area will establish frontier industrial clusters with key core technologies as breakthroughs, build integrated industrial base for integrated circuit, artificial intelligence innovation and application demonstration zone, civil aviation industry cluster, maintenance and re-manufacturing center to create an advanced manufacturing industrial base that reflects the national strategy, Shanghai's advantages, and international competitiveness.
In constructing highland of talents at home and abroad, Lin-gang Special Area will formulate a more active, open and effective talent policy by expanding openness, focusing on breakthroughs and improving autonomy, so as to provide a strong guarantee for gathering talents around the world.
In the establishment of the Yangshan Special Comprehensive Bonded Zone, Lin-gang Special Area implements a higher level of trade liberalization and facilitation policies and systems, enhances the function of expanding the global hub port, and implements a highly open international transportation management.
In the development of social industry, Lin-gang Special Area encourages international high-quality capital and social capital to enter public service fields such as education, medical care, old-age care, cultural and sports, park construction, urban operation, etc., and enhances the high-quality international urban service function of Lin-gang Special Area.
【New Law Express】
General Administration of Customs , P.R. China has promulgated Announcement of the General Administration of Customs on Matters Concerning the Handling of Voluntary Disclosure of Tax-related Violations
General Administration of Customs, P.R. China has promulgated Announcement of the General Administration of Customs on Matters Concerning the Handling of Voluntary Disclosure of Tax-related Violations (HGZSGG (2019) No. 161) (hereinafter referred to as the “Announcement”) on Oct.17, 2019, stipulating the circumstance that is exempted from administrative penalty for violations of customs regulatory provisions affecting tax collection (hereinafter referred to as the 'Tax-Related Violations') disclosed by import/export enterprises or organizations voluntarily before being discovered by the Customs, thereby improving the rules system of this favorable policy of “proactive disclosure”.
Pursuant to the Announcement, proactive disclosure of tax-related violations will be exempted from administrative penalties, including:
1. Proactive disclosure to the Customs within three months from the date when the tax-related violation occurs and voluntarily eliminating the harmful consequences;
This article means that if a company has a tax-related violation, it will be exempted from customs administrative penalty if it timely discloses to the customs within three months after its discovery and actively eliminates the harmful consequences. As long as the above conditions are met, administrative penalties can be exempted, with no tax-related limit.
2. Proactive disclosure to the Customs three months after the occurrence of tax-related violation, with the amount of evaded or underpaid tax accounting for less than 10% of the payable tax, or the amount of evaded or underpaid tax being less than CNY500,000 and voluntarily eliminating the harmful consequences.
Proactive disclosure to the Customs three months after the occurrence of tax-related violation, with the tax-related amount accounting for less than 10% of the tax payable or less than 500,000 yuan can be exempted from administrative penalties. This Announcement will increase the amount of tax to 500,000, and meet the requirements of either one can be exempted from administrative penalties .
New regulations of proactive disclosure are a supplementary safeguard measure introduced under the background of the comprehensive deepening of the business model reform of the Customs. It aims to establish a mechanism for proactive disclosure. Enterprises discovering and taking the initiative to propose amendments to tax-related declaration errors will be exempted from administrative penalties, which is a boon to import and export companies.
(Source from the Website of General Administration of Customs, P.R.China)
The upgraded China-Singapore Free Trade Agreement takes effect
On Oct. 15, 2019, Han Zheng, member of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee and Vice-premier of the State Council, and Heng Swee Keat, Singaporean Deputy Prime Minister, jointly announced at the China-Singapore bilateral cooperation mechanism meeting that the upgraded version of the China-Singapore Free Trade Agreement will take effect on Oct. 16..
The new agreement is a modified version of the previous Free Trade Agreement with revisions to six fields including the rules of origin, customs procedures and trade facilitation, trade remedy, trade in services, investment, and economic cooperation. Three cooperation fields including e-commerce, competition policy and environment were added to the document. The two sides agreed that the adjustment of the rules of origin involved in the upgraded version will be implemented on Jan. 1, 2020.
The upgraded version is projected to promote greater development of bilateral economic and trade relations, and continuously enhance the well-being of businesses and people in the two countries.
(SourceSource from the Website of Ministry of Commerce)
China Securities Regulatory Commission revised Administrative Measures on Significant Asset Restructuring of Listed Companies, allowing high-tech industries to be listed on the GEM
On Oct. 18, 2019, China Securities Regulatory Commission issued the Decision on Amending the ‘Administrative Measures on Significant Asset Restructuring of Listed Companies’ (hereinafter referred to as the 'Restructuring Measures') allowing high-tech industries and strategic emerging industry-related assets in line with national strategies to be restructured and listed on the GEM.
Restructuring and listing also refers to “backdoor listing”. Once the backdoor is successful, it may promote the stock price of listed companies that have been backed up. While the backdoor listing has received much attention, there have been many chaos. In September 2016, in order to crack down on the reorganization of the listing, the CSRC's Restructuring Measures carried out a major revision, which imposed strict restrictions on the conditions for backdoor listing.
The main revisions this time include: allowing high-tech industries and strategic emerging industry-related assets in line with national strategies to be restructured and listed on the GEM, and other assets may not be restructured and listed on the GEM.
Meanwhile, simplify criteria of restructuring and listing and cancel the 'net profit' indicator. The calculation period for the “cumulative first principle” was further shortened to 36 months. Rehabilitation of listed and listed financing. Enrich the performance compensation agreement and commitment supervision measures for major asset restructuring, and increase accountability.
(Source from the Website of China News)
【Our Firm’s Trends】
Veritas Law Corporation represented an electronic trading company in Shanghai in the case of a dispute over a sale contract with an electronic technology company in Shanghai and won in the first instance.
With respect to sales contract dispute arising from failure to refund prepayment made by an electronic trading company in Shanghai (hereinafter referred to as 'Electronic Trading Company' or 'Plaintiff') to an electronic technology company in Shanghai (hereinafter referred to as 'Electronic Technology Company' or 'Defendant') for purchasing electronic component, and the Electronic Trading Company filed a lawsuit against the Electronic Technology Company to Shanghai Pudong New Area People's Court, claiming the refund of the prepayment. Veritas represented electronic trading company and won in the first instance on Oct. 8, 2019 (the date of judgment).
After accepting the Plaintiff's entrustment, Veritas first understood the basic information of the case. In this case, the Plaintiff purchased electronic components from the Defendant and the two sides did not sign a written sales contract. The Plaintiff placed an order by e-mail and paid the advance payment by bank draft, transfer, and etc.. The Defendant delivered the goods by express delivery and issued an invoice. The two sides establish a long-term cooperative relation with rolling checkout. After the adjustment of the Plaintiff's business, the two sides no longer cooperate. Afterwards, the Plaintiff repeatedly asked the Defendant to refundthe advance payment, but always failed, and therefore filed the lawsuit. After elaborate pretrial preparations, comprehensive and in-depth evidence organization, well-founded court statements and effective communication with the court, Shanghai Pudong New Area People's Court finally granted judgment in favor of the Plaintiff and ordered the Defendant to return the advance payment and assume case acceptance fee.
This case is a typical case in a sales contract dispute. The winning of the case has the following guiding significance for the sales contract: in the actual transaction, a written sales contract is required; if the payment is made by means of cheques, bank drafts, and etc., the person who receives the bill must issue a receipt. The buyer and the seller shall settle the accounts on a regular basis and properly keep the documents such as orders, receipts, invoices, and settlement statements.
The solid legal foundation, serious and responsible work attitude, first-class high-quality and high-efficiency legal services of Veritas Team have won high praise and positive evaluation from customers.
He Lijuan, partner of Veritas, was invited to participate in the seminar on overseas investment of Chinese companies
On Oct. 16, 2019, He Lijuan, partner of Shanghai Veritas Law Corporation, was invited to participate in the seminar on overseas investment of Chinese companies, together with Mars Yu, audit consulting director of SBA, George Treacher, partner of Altas Blues Property, Victor Yu, investment expert, and Leon Cane, assistant director of Baldwins. They conducted detailed and professional discussions on related issues.
With the continuous development of China's economy and the growth of Chinese enterprises' economic strength, Chinese enterprises' foreign investment activities have become more frequent and active. Chinese enterprises' 'going global' has gradually become a policy consideration for the Chinese government to resolve trade surplus and foreign exchange reserve pressure. This seminar will discuss the issues that Chinese companies need to pay attention to in their foreign investment activities, and methods to avoid or reduce losses.
In this seminar, Ms. He Lijuan discussed it from two aspects. First is to hire professional consultants to conduct due diligence on the proposed investment projects or target companies (usually including financial accounting, business/market, legal, taxation, environmental protection, etc.) to understand the specific policies, laws and regulations of the host country or region, as well as concrete situations of the proposed investment project or target company. The second is due diligence. Due diligence is mainly conducted to find hidden risks of the target company or potential projects to provide reference for investment decisions. The focus of the survey varies depending on the concrete situations of the target company or potential projects. Therefore, it is beneficial to Chinese companies to invest abroad.
About Veritas
Shanghai Veritas Law Corporation is a comprehensive law corporation in China that provides perfect and comprehensive legal services to clients. With our professional skills and in-depth understanding of business, we provide a complete set of value-added legal service solutions for clients at home and abroad to help them achieve business goals.
We boast an excellent legal team paying close attention to client needs continuously, providing clients with practical solutions and pioneering professional advice. We strive to provide excellent services and take pride in establishing friendly and long-term partnership with our clients.
Through our international partners' offices in more than 20 cities including New York, Los Angeles, Singapore, Taiwan, Myanmar, Vietnam, Malaysia, India, Indonesia, Sri Lanka, Mexico, London and Oman, we are committed to providing professional services for Chinese enterprises to develop business in Asia, the United States, the Middle East, Latin America, the United Kingdom and other countries.
This paper is only for the purpose of sharing information. Nothing in this paper constitutes any legal opinions or suggestions of Shanghai Veritas. For more information, please visit our website 'www.shveritas.com' or follow our WeChat Official Account 'Shanghai Veritas Law Corporation'.
