China Regulatory Brief: Two-child Policy and China Advance Pricing Arrangement Annual Report

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China-Regulatory-Brief
Guangdong Officially Implements the Two-child Policy

On December 30, the Guangdong provincial government approved and issued its local “Population and Family Planning Regulations,” which took effect on January 1, 2016. The new Regulations amend the rules that are inconsistent with the national two-child policy, abolishing the late marriage and late childbirth additional holidays and extending its additional maternity leave to 30 days. This means that any female employee that gives birth in accordance with the laws and regulations (be it one child or two children) in Guangdong are entitled to a maternity leave of 128 (China’s base length of maternity leave is 98 days). Meanwhile, the paternity leave for the husband is increased from 10 days to 15 days. 

While the key points of China’s maternity leave are legislated at the national level, a significant part of the system is regulated at the local level, as is common with many matters concerning human resources and social security. Guangdong is the first province in the country to revise the local maternity leave rules after the two-child policy was implemented nationwide. Shanghai has also announced that couples that are registered after January 1 will no longer be entitled to the late marriage holiday. 

China Advance Pricing Arrangement Annual Report (2014) Released

On December 18, the State Administration of Taxation (SAT) released the “Annual Report on China’s Advance Pricing Arrangement (2014)” in both Chinese and English. The report introduces China’s APA system, implementation procedures as well as practical development, covering the statistical data and analysis of APAs signed between 2005 and 2014. An advance pricing agreement (APA) is an ahead-of-time agreement between a taxpayer and a tax authority on an appropriate transfer pricing methodology (TPM) for a set of transactions at issue over a fixed period of time. 

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China Releases Online Payment Regulations

On December 28, the People’s Bank of China issued the Measures for Administration of Online Payment Business of Non-Banking Payment Institutions, which will become effective on July 1, 2016. The Measures put more restriction on online payment businesses and online transfer businesses carried out by non-financial institutions.

The Measures divided the personal payment accounts into three types. All of the three types of accounts can be used for consumption and transfer, but only Type III accounts can be used for investment. The new regulations also put a maximum purchasing limit on online payment accounts. For example, customers of Type I accounts will be allowed to transfer/purchase only RMB 1,000 worth of goods or services starting the date they open the account. 

Fujian FTZ Abolishes Filing Procedures for Taiwan Companies

On December 22, the Fujian free trade zone (FTZ) released an announcement (Gong shang ge zi [2015] No.208) that allowed Taiwan residents to set up a company (excluding a franchise) in the zone without going through the foreign exchange record-filing procedures. Along with the announcement, the FTZ also released a list of 129 industries where Taiwan companies are allowed to invest in. The 129 industries include crop farming, food and beverage manufacturing, advertisement (not including publishing the advertisement) and certain commercial services.


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