Internet Censorship and China’s New Online Publication Law

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Internet challenges in ChinaBy Dezan Shira & Associates
Editor: Jake Liddle

China’s new Online Publishing Service Administrative Rules became effective on March 10, 2016. The law, which aims to “regulate the criteria of and promote the healthy development of internet publishing services”, has already curbed the online activity of several Western MNCs – including Apple’s iTunes and Disney’s DisneyLife – but what wider implications do the rules have for internet censorship in China?

The new online publishing rules form part of President Xi Jinping’s broader efforts to utilize China’s so called ‘Great Firewall’ to control the flow of online information. In a meeting held in April, China’s State news agency Xinhua quoted Xi as saying: “China must improve management of cyberspace and work to ensure high-quality content with positive voices creating a healthy, positive culture that is a force for good”. With 25 percent of internet sites currently blocked in China compared to the 14 percent before Xi came into power, it is evident that the country’s new approach is effective.

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China Market Watch: Postponement of New Cross Border e-Commerce Regulations & Slowdown in China’s Services Sector Growth

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New Tariff Policy for Cross Border e-Commerce Likely to be Postponed

On May 10, Shanghai Securities News reported the possibility of adjustments to a new cross border e-commerce tariff policy brought into effect last month. The report suggests postponement of the new cross border e-commerce tax policies and restrictions imposed on foreign exporters for one year. During the expected transition period, cross border retailers could prepare for the changes brought by the new round of policy revision. This is the latest in a number of adjustments that have already been made to online import restrictions. Several ministries including the Ministry of Commerce, the General Administration of Customs, and the Ministry of Finance have conducted research on the effects of the policy on cross border e-commerce, inquiring with third-party online e-commerce platforms and working on changes to the current rules.

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Transfer Pricing in China 2016 – New Publication from China Briefing

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Transfer pricing 250 x 350

Transfer Pricing in China 2016, the latest publication from China Briefing and Dezan Shira & Associates, is out now and available for purchase through the Asia Briefing Bookstore.

Transfer pricing is a reality for any multinational company. As a result of a globalized economy and increasing complexity in business models, tax authorities around the world are actively protecting their revenue base through the introduction of transfer pricing regimes, which focus on the taxation of profits that stem from related party transactions. These transfer pricing regimes will typically provide guidance to taxpayers on how related party transactions should be priced and how taxpayers can discharge the burden of proof that their transfer pricing arrangements comply with the arm’s length standard.

If designed and implemented early in a business life, a transfer pricing system can complement and support an MNC’s business model and commercial objectives, as well as optimize its global effective tax rate.

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China’s New NGO Law: Navigating the Restrictions and Application Procedures

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By Dezan Shira & Associates
Editor: Jake Liddle

Since China’s reform and opening up in the 80s, foreign NGOs have been instrumental in channeling capital, intelligence and expertise into the country’s development and expansion. Over the years, this contribution has alternately been welcomed and looked upon with skepticism by the state. Now, with the recent ratification of the “Administrative Law on Activities of Overseas Non-government Organizations within the Territory of the People’s Republic of China” – the first comprehensive guiding law for foreign NGOs – China’s position on their activities is set to take a new and more restrictive form.

Promulgated on April 28 and due to come into effect on January 1, 2017, the new law places stringent constraints on the registration, operation and funding of foreign NGOs in the name of protecting national security. It is estimated that around 7000 foreign groups and organizations with existing operations in China will be affected, and that the incorporation process for new NGOs will be significantly more difficult.

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Shifting Gears: Investing in China’s Electric Vehicles Market

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Electrical Car TeslaBy Zolzaya Erdenebileg

Many in the industry already saw it coming, but China now officially outranks the United States in one more category: sales of new-energy vehicles (NEVs). According to 2015 statistics provided by the China Association of Automobile Manufacturers (CAAM), China produced and sold over 300,000 units of NEVs, an increase of over 300 percent year-on-year. Other areas of the industry are almost as dynamic: battery electric vehicles (BEVs) totaled almost 250,000 units during the same year – an increase of over 400 percent year-on-year – while plug-in hybrid electric vehicle (PHEV) sales totaled over 80,000 units, increasing almost 200 percent year-on-year.

Conversely, the United States saw its NEV sales slow down as oil prices decreased. This change in ranking comes as China continues to strengthen its push towards green development. NEVs, which here refers to all-electrics, plug-in hybrids, and hydrogen fuel-cell vehicles, is one of the key industries that China will foster for at least the next half-decade.

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Understanding How China’s VAT Reform Has Affected the Real Estate and Construction Sectors

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By Dezan Shira & Associates
Editor: Jake Liddle

Effective as of May 1, China completed the last step in its extensive business tax to VAT reform by extending the previous pilot programs to cover the remaining sectors of finance, life services, property and construction. The reform was initiated with the aim to reduce the tax burden of businesses, with an estimated 97 percent of tax payers to pay less tax with savings of over RMB 300 billion.

Previously, the real estate and construction industries were subject to three and five percent business tax (BT) respectively, but both are now subject to 11 percent VAT. There is no value in making a direct comparison between the two, however, as VAT is assessed on a net basis, and BT on a gross basis.

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China Regulatory Brief: China-Sri Lanka FTA and Regulations on Housing Leasing Sector

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The State Council Decides to Develop the Housing Leasing Industry

On May 4, Li Keqiang headed a State Council meeting deciding to implement a specialized supervision effort to promote and expand private investment into China’s rental market, as well as to encourage deeper integration between the manufacture sector and the internet. The State Council has also determined to define the measures to develop the residential leasing market and expanding new urbanization in order to meet the demands of the people, and to promote development of the aviation industry.

In particular, four specific measures to support the development of the housing leasing market were put forward during the meeting, including: supporting the use of the built housing or newly built housing for carrying out the leasing business; encouraging individuals to lease self-owned housing and convert the commercial housing into leasing housing; promoting monetization of public leasing housing; improving the preferential tax policies; and introducing the unified model texts of the housing leasing agreements, etc.

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Changing Registered Company Address in China: Effects of the New Integrated Business License

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By Dezan Shira & Associates
Editor: Jake Liddle

A change of address for a business is sometimes a necessary step towards securing long-term gains. A company’s address is a core element of registered information (along with its business scope, registered capital, and company name, etc.), and making changes to this information can be a somewhat complex process. In our previous article, we provided a step-by-step guide to changing the registered address of a business in China. However, the application procedure for registering/changing company the address for a foreign-invested enterprise (FIE) has been affected by the country’s introduction of the new “three-in-one” business license. This article lays out the simplified procedure for applicants seeking to change their registered company addresses and explores the major changes to the regulation.

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