China Regulatory Brief: Simplified Customs Procedures & New Overtime Policy

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China Further Simplifies Customs Procedures

On April 10, the General Administration of Customs (GAC) released an “Announcement on Expanding the Scope of ‘Local Declaration and Clearance’ (GAC Announcement [2014] No.28, hereinafter referred to as the ‘Announcement’)”. Eligible enterprises can choose any local Customs for the declaration and clearance of their imported/exported goods.

Business operators are divided into five levels for Customs administration purposes, namely AA, A, B, C and D based on the business operations, import and export value and the record of Customs supervision. Previously, the policy only applied to business operators under Category AA for Customs administration. Now it has been expanded to also cover business operators that fall under Categories A and B. The Announcement will take effect on May 1, 2014.

China Announces VAT Rates for Almond Oil and Grape Seed Oil

On April 11, the State Administration of Taxation (SAT) released an “Announcement on Issues Related to Value-added Tax (VAT) Rates Applicable to Almond Oil and Grape Seed Oil (SAT [2014] No.22, hereinafter referred to as the ‘Announcement’)”. According to the Announcement, almond oil and grape seed oil fall under the edible vegetable oil category and a 13 percent VAT rate applies. The Announcement will take effect on June 1, 2014.

China Opens Infrastructure Projects to Private Capital

On April 23, the State Council announced the opening up of 80 infrastructure projects to private capital, including transportation infrastructure, such as railways and ports, and next generation information infrastructure, such as hydroelectric and wind power. Previously, the infrastructure construction sector is dominated by state-owned enterprises (SOEs). According to the new “opening-up policy,” enterprises are now encouraged to participate in these projects through joint ventures, sole proprietorships and franchises.

Projects in exploration of oil and gas, utilities, airports and other fields will be open to private capital at a later stage.

Jiangsu Province Opens up Elderly Care to Foreign Investment

On April 21, Jiangsu Province held a press conference on the newly released “Implementing Opinions on Accelerating the Development of Elderly Care Industry and Improving the Elderly Care System (hereinafter referred to as the ‘Opinions’)”. According to the Opinions, domestic and foreign-invested elderly care institutions will be entitled to the same preferential policies, including various tax exemptions.

By year 2020, there should be 40 beds for every thousand elderly people, and all elderly care personnel should have received training prior to starting work.

Wenzhou Clarifies Regulations on Working Overtime

On April 21, the Wenzhou Municipal Human Resources and Social Security Bureau released the “Circular on Further Implementation of Relevant Provisions on Overtime Work (hereinafter referred to as the ‘Circular’)”. According to the Circular, overtime work should be limited to one hour per day with the consensus of both the Trade Union and employee. Three hours of overtime work per day are permissible under special circumstances. But the total overtime hours per month should not exceed 36 hours. Further, overtime wages should be no less than 150 percent of the employee’s hourly wage.

Shanghai FTZ Opens Up Cultural Markets

On April 10, the General Office of the Shanghai Municipal Government issued the “Detailed Rules Regarding Opening Up China (Shanghai) Free Trade Zone Cultural Market Projects (hereinafter referred to as the ‘Rules’)” formulated by the Shanghai Bureau of Culture, Broadcast, Film & Television.

The Rules aim to open up the currently restricted “cultural markets” in the Shanghai FTZ, enumerating approval processes for gaming entertainment equipment to be sold in domestic markets as well as for foreign-invested performance entertainment agencies and venues to register and apply for a “commercial performing license” within the FTZ.

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