China Law Update : China Business Law Lawyers & Attorneys : Sheppard Mullin Law Firm : Direct Investment, Dispute Resolution, Intellectual Property, Antitrust, Venture Capital

The role of income tax treaties is important at a time when international trade and transactions continue to increase. Countries enter into income tax treaties – also known as double taxation agreements or double tax treaties – on bilateral basis to prevent double taxation (i.e., taxes levied by both countries on the same income, profit, capital gain, inheritance or other item). China has entered into such treaties with more than 80 countries and territories.

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China's Ministry of Commerce (MOFCOM) has released new Rules on Overseas Investment ("New Rules"), which will make it easier for Chinese enterprises to get approval to invest overseas. The New Rules will go into effect on May 1, 2009.

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The website of the Anti-monopoly Bureau of the Ministry of Commerce (“Anti-monopoly Bureau”) has become “the must-see site” for antitrust lawyers practicing in China. See http://fldj.mofcom.gov.cn/. Since the beginning of 2009, the Anti-monopoly Bureau has used the site to announce six drafts of various provisions and guidelines, and two transitional guidelines regarding implementation of a new pre-merger filing system under the Anti-monopoly Law.

Following the announcement of thresholds for pre-merger filing in China, Anti-monopoly Bureau is actively constructing the new pre-merger filing system in compliance with the Anti-monopoly Law and working to clarify vague areas of the new law.
 

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The Recycling Economy Promotion Law (also translated as the “Circular Economy Promotion Law”) went into effect in China on January 1, 2009.  This new law’s aim is to promote the efficiency of resource use, protect the environment, and improve the sustainable development.
 

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On January 23, 2009, China's State Administration of Taxation (“SAT”) issued a Notice on the Issues Concerning Withholding the Enterprise Income Tax on the Dividends and Interest Paid by Chinese Resident Enterprises to Qualified Foreign Institutional Investors (“QFIIs”) (hereinafter referred to the “Notice”). The Notice clarifies some withholding tax rules relating to QFIIs under both the Enterprise Income Tax Law of China (hereinafter referred as to the “EIT Law”) and the Regulation on the Implementation of the Income Tax Law of China (hereinafter referred to as the “EIT Regulation”).
 

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