China Regulatory Brief: Injury Insurance in Guangzhou, Annual Inspections in Dongguan and Container Export Refunds
On October 22, Australia’s Treasurer Joe Hockey announced that Australian coal will be exempted from China’s new tariffs on imported coal based on the Free Trade Agreement (FTA) in negotiation between the two countries. On October 15, China restarted its levy of import tariffs on coal after nearly a decade of suspension, aiming to boost its domestic coal industry and curb carbon emissions. Australia, the largest exporter of coal to China, was severely threatened by this new policy and opened an urgent discussion with China last week to seek a reversal of the decision. During the meeting, the Chinese government urged Australia to relax restrictions on Chinese investment in return.
Guangzhou Releases Provisions on Work-related Injury Insurance
The Guangzhou municipal government recently released the “Provisions on Work-related Injury Insurance in Guangzhou (Hui Fu  No.30),” which took effect on September 1, 2014 and will be valid for five years. According to the Provisions, work-related injury insurance premiums are to be levied based on a rate of between 0.5 percent and 1.5 percent of an employee’s gross wages in the previous year. Further, employees suffering a work-related injury will be able to apply for a paid recovery leave of no more than 12 months.
Dongguan Changes Annual Inspection Timeframe
At the end of September, China’s State Council released the “Provisional Regulation on Corporate Information Disclosure,” which stipulated that all enterprises established in Dongguan should undergo annual inspection based on a newly-revised timeframe starting on October 1, 2014 and lasting until June 30, 2015. This differs from the usual period for annual inspections from January to June. A detailed analysis of annual inspections and compliance in China can be found here.
Shenzhen Special Economic Zone Establishes Workforce Protection Fund
The Shenzhen Special Economic Zone (SEZ) recently revised and implemented its “Guarantee of Wages Regulation,” originally ratified in 1997. According to the revised regulation, in the event that an employer owes an employee a “serious” amount of wages, the employee can report the employer to the Shenzhen credit reporting system for enterprises and individuals. Under the new credit system, the overdue payment of wages will have a direct negative impact on such enterprises. Further, enterprises will be required to contribute an amount of RMB400 in the first quarter of each fiscal year to a workforce protection fund with the Shenzhen municipal bureau of labor and social security. Failure to pay the fee within the window stipulated by the local bureau will result in a penalty of RMB2000.
China Clarifies Tax Refund Policies for Container Exports
On October 21, the State Administration of Taxation (SAT) released the “Announcement on Tax Refund (Exemption) Issues for Enterprises Exporting Containers (SAT Announcement  No.59).” According to the Announcement, enterprises engaging in the export of new containers to foreign enterprises shall enjoy an export tax refund (exemption) policy if they meet the following conditions:
- Arrange the delivery at stipulated storage areas in China; and
- Make an export declaration and complete a Customs Declaration Form for Imports and Exports.
The policy shall apply to containers exported after 2014.
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