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Policy Updates |
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Policy Updates |
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The Labor Dispute Law Provides a Fairer Way for Employees to Resolve Labor Disputes. |
| Implementation Regulations for the Enterprise Income Tax Law Clarify the Definition of Hi-Tech Enterprises. |
| Catalogue Foreign Direct Investment Defines What is Supported by the PRC Government |
| China¡¯s First Comprehensive Regulation-the Pensions Insurance Measures Issued |
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The Labor Dispute Law Provides a Fairer Way for Employees to Resolve Labor Disputes.
In addition to the Labor Contract Law and the New Labor Law, which were passed in July, 2007, China¡¯s National People¡¯s Congress also passed the Law on Labor Dispute Mediation and Arbitration (the Labor Dispute Law) in December, 2007 which is designed to protect the rights and interests of employees by providing detailed provisions for mediation and arbitration in order to resolve labor disputes. Some important changes include: the time limits to apply for arbitration is extended from 60 days to one year, and the processing period of labor dispute arbitration has been shortened to 50 days. The Labor Dispute Law also makes the employer more responsible for things like providing evidence.
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Implementation Regulations for the Enterprise Income Tax Law Clarify the Definition of Hi-Tech Enterprises.
Issued by the State Council in December, 2007, the Enterprise Income Tax Law clarifies the detailed conditions for qualifying as a high-tech enterprise that, by law, may enjoy a preferential tax rate of 15 percent. These conditions include: independent ownership of the company¡¯s core intellectuals property rights; its products or services are included in the catalogue of ¡°Areas of High and New Technology Encouraged by the State¡±, as issued by the State Council; its expenses for research and development exceed a certain percentage of annual sales revenue; its income from high-tech products or services exceeds a certain percentage of total revenue; and the number of R&D personnel exceeds a certain percentage of all employees. It is expected that the detailed percentages and other additional conditions will be clarified in the near future.
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Catalogue Foreign Direct Investment Defines What is Supported by the PRC Government
The Catalogue for the Guidance of Foreign Investment Industries, issued jointly by the
National Development and Reform Commission and the Ministry of Commerce took effect on December 1, 2007, replacing a previous edition issued in 2004. The new edition of Investment Industries aims to steer foreign investment into industries that promote energy conservation, environmental protection, and technological innovation. Contact BCG for further information.
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China¡¯s First Comprehensive Regulation-the Pensions Insurance Measures Issued
Measures for the Administration of Pension Insurance Business of Insurance Firms (Pension Insurance Measures) were issued on November 2, 2007, and became effective as of January 1, 2008.
The Regulation promulgated that life insurance and pension insurance firms may operate pension insurance businesses in China with approval of the China Insurance Regulatory Commissions, providing individual pension annuity insurance, group pension annuity insurance, and annuity management for enterprises. The Regulation for the first time clarifies the ownership of rights and interests in group pension insurance: ¡°In the case of a group pension annuity insurance premium, shared by the applicant (group) and an insured individual, the rights and interests vested in the insured shall be completely owned by the insured¡±. The Pension Insurance Measures also impose a number of requirements on both insurance firms and their pension insurance operations.
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