This regulatory update covers tax adjustments in the Hengqin Guangdong-Macao Deep Cooperation Zone, a pilot stamp duty policy for offshore trade in the Shanghai FTZ and Lingang New Area, new rules on the jurisdiction of tax-related administrative cases in Shanghai, 2023 individual income tax filing and settlement procedures, typical cases on animal liability released by the Supreme People’s Court, draft regulations on capital contribution under the Company Law, and R&D expense super deduction policies for industrial parent machine enterprises.

Notice of the Ministry of Finance and the State Taxation Administration on Adjusting the Scope of Goods Subject to VAT and Consumption Tax Refunds in the Hengqin Guangdong-Macao Deep Cooperation Zone (Cai Shui [2024] No. 1)

To: The Department of Finance of Guangdong Province, the Guangdong Provincial Tax Service of the State Taxation Administration:

In order to implement the spirit of the "Overall Plan for the Construction of the Hengqin Guangdong-Macao Deep Cooperation Zone," the following adjustments regarding the scope of goods subject to VAT and consumption tax refunds in the Hengqin Guangdong-Macao Deep Cooperation Zone (hereinafter referred to as the "Cooperation Zone") are hereby notified:

1.     Goods entering the Cooperation Zone from the mainland via the "second line" will be treated as exports and subject to VAT and consumption tax refund policies. However, the following goods are excluded:

Ÿ   Goods exported that are not subject to VAT refund (exemption) and tax-free policies as stipulated by the Ministry of Finance and the State Taxation Administration.

Ÿ   Other goods from the mainland sold to the Cooperation Zone that are not eligible for refunds. The specific scope is outlined in the attachment.

Ÿ   Goods purchased by enterprises that have had their VAT and consumption tax refund or exemption qualifications revoked, according to relevant regulations.

2.     This notice will come into effect from the date when the relevant regulatory facilities of the Cooperation Zone pass inspection and are officially operational. The implementation date for VAT and consumption tax refunds will be based on the export date indicated on the export declaration form.

3.     The specific administrative measures for VAT and consumption tax refunds will follow the current policies.

Ministry of Finance

State Taxation Administration

January 11, 2024

Attachment: List of goods sold from Mainland China to the Hengqin Guangdong-Macao In-depth Cooperation Zone that are not eligible for export tax refund（https://fgk.chinatax.gov.cn/zcfgk/c102416/c5220510/content.html）

Notice of the Ministry of Finance, the General Administration of Customs, and the State Taxation Administration on the Tax Policies for Personal Luggage and Courier Items in the Hengqin Guangdong-Macao Deep Cooperation Zone (Cai Guan Shui [2024] No. 2)

To: The Department of Finance of Guangdong Province, the Guangdong Regulatory Bureau of the Ministry of Finance, the Guangdong Branch of the General Administration of Customs, Gongbei Customs, the Guangdong Provincial Tax Service of the State Taxation Administration, and the Guangzhou Special Commissioner’s Office of the State Taxation Administration:

In order to implement the spirit of the "Overall Plan for the Construction of the Hengqin Guangdong-Macao Deep Cooperation Zone," and with the approval of the State Council, the following tax policies regarding personal luggage and courier items in the Hengqin Guangdong-Macao Deep Cooperation Zone (hereinafter referred to as the "Cooperation Zone") are hereby notified:

1.     A "first line" is established between Hengqin and the Macao Special Administrative Region (hereinafter referred to as "Macao"). Personal luggage and courier items entering the Cooperation Zone via the "first line," limited to personal use and reasonable quantities and in compliance with relevant management regulations, will be released by Customs free of tax, except for those items explicitly prohibited from tax exemption under national laws and administrative regulations. After being released from Customs duty, the personal luggage and courier items can be used for normal consumption.

2.     A "second line" is established between Hengqin and other areas within the People's Republic of China (hereinafter referred to as the "Mainland"). Personal luggage and courier items entering the Mainland from the Cooperation Zone via the "second line," limited to personal use and reasonable quantities, will be subject to supervision and taxation according to the relevant regulations applicable to goods entering the Mainland from Macao. Items exceeding personal use and reasonable quantities entering the Mainland from the Cooperation Zone via the "second line" will be treated as goods subject to customs management. Goods that have already been taxed with domestic VAT and consumption tax or goods on which import duties, VAT, and consumption tax have been paid within the Cooperation Zone will not be subject to additional taxation upon entry into the Mainland.

For passengers (excluding non-resident travelers) carrying goods with a value not exceeding 8,000 RMB (including 8,000 RMB) when entering the Mainland from the Cooperation Zone via the "second line," Customs will release the goods tax-free. Non-resident travelers will continue to follow the current regulations for goods entering the Mainland.

3.     For travelers who frequently travel back and forth between Macao and the Cooperation Zone via the "first line" or between the Cooperation Zone and the Mainland via the "second line," Customs will only release the items necessary for their journey.

4.     Goods obtained duty-free by travelers are for personal use and cannot be resold.

5.     Individuals who violate the provisions of this notice by reselling, purchasing on behalf of others, or smuggling goods into the country will be included in the credit records by the Cooperation Zone Executive Committee, in collaboration with relevant departments, in accordance with laws and regulations. Customs and other regulatory authorities will handle smuggling or violations of Customs supervision regulations according to the relevant provisions, and criminal responsibility will be pursued in accordance with the law if the actions constitute a crime.

6.     The Cooperation Zone Executive Committee shall develop supporting management measures related to this notice, clarify the criteria for determining the origin and tax payment status of goods entering the Mainland via the "second line," and strengthen supervision according to their responsibilities.

7.     The Guangdong Regulatory Bureau of the Ministry of Finance, the Guangdong Branch of the General Administration of Customs, Gongbei Customs, the Guangdong Provincial Tax Service of the State Taxation Administration, and other relevant provincial departments will strengthen supervision and inspection of the implementation of financial and tax policies in the Cooperation Zone to prevent illegal activities. In the event of significant issues, they shall promptly report to the Ministry of Finance, the General Administration of Customs, and the State Taxation Administration.

8.     This notice shall come into effect on the date when the relevant regulatory facilities of the Hengqin Guangdong-Macao Deep Cooperation Zone pass inspection and are officially operational. The "Notice of the Ministry of Finance on the Specific Provisions for the Luggage and Items Carried by Passengers Entering Hengqin via the 'First Line' and the 'Second Line' into the Mainland" (Cai Guan Shui [2013] No. 30) will be simultaneously repealed.

9.     For other situations not specified in this notice, the current regulations shall apply.

This is hereby notified.

（https://fgk.chinatax.gov.cn/zcfgk/c102416/c5220336/content.html）

Ministry of Finance

General Administration of Customs

State Taxation Administration

January 3, 2024

Notice of the Ministry of Finance and the State Taxation Administration on the Pilot Offshore Trade Stamp Duty Preferential Policy in China (Shanghai) Pilot Free Trade Zone and Lingang New Area (Cai Shui [2024] No. 8)

To: The Shanghai Municipal Finance Bureau and the Shanghai Municipal Tax Service of the State Taxation Administration:

In order to support the development of offshore trade in the Free Trade Pilot Zone, the following notice is issued regarding the pilot offshore trade stamp duty preferential policy in the China (Shanghai) Pilot Free Trade Zone and Lingang New Area:

1.     Enterprises registered in the China (Shanghai) Pilot Free Trade Zone and Lingang New Area that engage in offshore trading transactions through the purchase and resale of goods by a resident enterprise to a non-resident enterprise, where the goods never actually enter or exit the customs territory of China, will be exempt from stamp duty on the sale and purchase contracts involved.

The "offshore trade" referred to in this notice means transactions where a resident enterprise purchases goods from a non-resident enterprise and then resells those goods to another non-resident enterprise, with the goods never physically entering or leaving the country’s customs territory.

2.     This notice will be effective from April 1, 2024, until March 31, 2025.

（https://fgk.chinatax.gov.cn/zcfgk/c102416/c5221269/content.html）

Ministry of Finance

State Taxation Administration

February 6, 2024

Regulations of the Shanghai Higher People's Court on the Centralized Jurisdiction of Administrative Cases Involving Taxation Departments in the City (February 23, 2024)

In order to optimize the business environment and ensure the fair and just trial of tax-related administrative disputes, in accordance with the provisions of Article 18, Paragraph 2 of the Administrative Procedure Law of the People's Republic of China, and in light of the actual judicial situation in Shanghai, with approval from the Supreme People's Court, it is hereby decided that administrative cases in which taxation departments are parties shall be centrally governed by the Shanghai Railway Transport Court and the Third Intermediate People's Court of Shanghai. The following provisions are set forth:

1.     Effective from February 23, 2024, the Shanghai Railway Transport Court shall centrally govern first-instance administrative cases in which the tax authority is the defendant, previously under the jurisdiction of grassroots people's courts in Shanghai. The People's Courts of Pudong New Area, Minhang District, and Jing'an District shall no longer handle first-instance administrative cases with taxation departments as defendants.

2.     Effective from February 23, 2024, the Third Intermediate People's Court of Shanghai shall centrally govern first-instance administrative cases involving taxation departments as defendants and second-instance administrative cases in which taxation departments are the appellant or appellee, previously under the jurisdiction of relevant intermediate people's courts in Shanghai. The First Intermediate People's Court of Shanghai and the Second Intermediate People's Court of Shanghai shall no longer handle such cases.

3.     For administrative cases with taxation departments as defendants, which have been accepted by grassroots or intermediate people's courts in Shanghai before February 23, 2024, but have not been concluded, the accepting court shall continue to handle them as prescribed by law. Cases that have received materials but have not been registered or filed shall be notified to the parties to file lawsuits according to the jurisdictional rules with the Shanghai Railway Transport Court or the Third Intermediate People's Court of Shanghai, or the materials will be transferred to these courts with notification to the parties.

4.     For second-instance administrative cases where taxation departments are the appellant or appellee and have been accepted by intermediate people's courts before February 23, 2024, but not yet concluded, the accepting court shall continue to handle them as prescribed by law. Cases that have received materials but have not been registered or filed shall be transferred to the Third Intermediate People's Court of Shanghai and the parties will be notified.

5.     Effective from February 23, 2024, when an intermediate people's court of Shanghai needs to send a case back for retrial, order acceptance, or continue trial of a first-instance administrative judgment made by a grassroots people's court with taxation departments as defendants, the ruling shall be made by the original trial court.

6.     Effective from February 23, 2024, if a party believes that an effective administrative judgment, ruling, or mediation document issued by a grassroots people's court involving taxation departments as defendants contains errors, the party may apply for retrial with the Third Intermediate People's Court of Shanghai. If retrial is necessary, the Third Intermediate People's Court of Shanghai will rule on transferring the case for retrial or instruct the grassroots people's court to retrial.

Effective from February 23, 2024, for retrial applications related to effective administrative judgments, rulings, or mediation documents made by the First and Second Intermediate People's Courts of Shanghai involving taxation departments as parties, the Shanghai Higher People's Court will make a ruling on whether retrial is necessary, and if so, direct the relevant intermediate people's court to conduct the retrial.

7.     If the president of a people's court believes that an administrative judgment, ruling, or mediation document involving taxation departments as parties and having legal effect contains errors and applies for retrial, the jurisdiction for retrial will be handled according to the original jurisdictional rules.

8.     The handling of non-litigation administrative enforcement cases with taxation departments as applicants shall be carried out according to the original jurisdictional rules.

9.     Administrative cases involving taxation departments as defendants that have been tried by the People's Courts of Pudong New Area, Jing'an District, Minhang District, and the First and Second Intermediate People's Courts of Shanghai, and in which the parties apply for enforcement of effective administrative judgments, rulings, or mediation documents, shall be enforced by the original trial court.

10.  The term "before" in this regulation excludes the date mentioned, while "after" includes the date mentioned.

11.  The Shanghai Higher People's Court may, as necessary, designate relevant courts within the jurisdiction to handle related cases.

12.  These regulations shall take effect on February 23, 2024. In the event of any inconsistency between these regulations and the previous provisions of the Shanghai Higher People's Court, these provisions shall prevail.

Announcement by the State Taxation Administration on the Matters Concerning the Filing and Settlement of Comprehensive Individual Income Tax for the Year 2023 (State Taxation Administration Announcement No. 2 of 2024)

In accordance with the Individual Income Tax Law and its implementation regulations, the Tax Collection and Administration Law and its implementation rules, and other relevant provisions, the following matters are announced regarding the filing and settlement of the 2023 individual income tax for comprehensive income (hereinafter referred to as the "settlement"):

1.     Main Contents of the Settlement

After the end of the 2023 fiscal year, resident individuals (hereinafter referred to as "taxpayers") must consolidate their income from four sources of comprehensive income, including wages, labor remuneration, royalties, and royalties, received from January 1 to December 31, 2023. They will then deduct the allowable expense of 60,000 yuan, special deductions, additional deductions, legally determined other deductions, and eligible donations to public welfare charities. The applicable personal income tax rate for comprehensive income will be applied, and the quick calculation deduction will be subtracted (the tax rate table is provided in Attachment 1). The final taxable amount will be calculated, followed by subtracting the taxes already prepaid in 2023, resulting in either a tax refund or an additional tax payment. The formula for this calculation is as follows:

Refundable or Payable Tax = [(Comprehensive income - 60,000 yuan - "Three Insurances and One Fund" special deductions - Child education and other special additional deductions - Legally determined other deductions - Eligible charity donations) × applicable tax rate - quick calculation deduction] - taxes already prepaid.

The settlement does not involve taxpayers' rental income or other classified income, nor income that is not included in the comprehensive income for tax purposes.

2.     Circumstances Where Settlement Is Not Required

Taxpayers who have legally prepaid individual income tax in 2023 and meet any of the following conditions do not need to file a settlement:

Ÿ   If the settlement results in additional tax but the total comprehensive income for the year does not exceed 120,000 yuan;

Ÿ   If the additional tax amount due from the settlement does not exceed 400 yuan;

Ÿ   If the taxes already prepaid are consistent with the tax payable after the settlement;

Ÿ   If they qualify for a tax refund but do not apply for the refund.

3.     Circumstances Where Settlement Is Required

Taxpayers must file a settlement if any of the following conditions apply:

Ÿ   If the taxes already prepaid exceed the tax payable after the settlement and they apply for a tax refund;

Ÿ   If the comprehensive income received in 2023 exceeds 120,000 yuan and the additional tax payable from the settlement exceeds 400 yuan.

If due to errors in the application of income items or failure of withholding agents to fulfill their withholding duties, taxpayers fail to report comprehensive income correctly or at all for 2023, they must file a settlement based on actual circumstances in accordance with the law.

4.     Eligible Deductions Before Tax

Taxpayers can report or supplement the following deductions for the year 2023 during the settlement period:

Ÿ   A deduction of 60,000 yuan, along with social insurance contributions (such as basic pension insurance, basic medical insurance, unemployment insurance) and housing provident fund contributions that meet the conditions for special deductions;

Ÿ   Special additional deductions for eligible expenditures such as child care for children under three years old, child education, continuing education, serious illness medical expenses, housing loan interest or housing rent, and elderly care;

Ÿ   Deductions for eligible enterprise annuities, occupational pensions, commercial health insurance, and individual pensions;

Ÿ   Donations to public welfare charities that meet the conditions.

Taxpayers receiving both comprehensive income and business income may declare the 60,000-yuan deduction, special deductions, additional special deductions, and other legally determined deductions in either comprehensive income or business income but cannot declare the same deductions twice.

Taxpayers who declare special additional deductions for childcare of children under three, child education, serious illness medical expenses, housing loan interest, and housing rent with their spouse, or elderly care deductions with siblings, should communicate with the other declarants to avoid exceeding the prescribed amounts or proportions. If a taxpayer files incorrect declarations, tax authorities will issue reminders through the personal income tax app, electronic tax bureau website, or withholding agents. According to the "Announcement of the Ministry of Finance and the State Taxation Administration on the Policy Issues Related to Comprehensive Individual Income Tax Settlement" (Announcement No. 94 of 2019), taxpayers who refuse to correct their information or explain the situation will have their eligibility for special additional deductions suspended. Once the taxpayer corrects the information or provides an explanation, they may continue to enjoy the deductions.

5.     Processing Time

The processing time for the 2023 annual tax reconciliation is from March 1, 2024, to June 30, 2024. Taxpayers who do not have a domicile in China and who leave the country before March 1, 2024, may handle the reconciliation before departure.

6.     Processing Methods

Taxpayers may choose from the following processing methods:

Ÿ   Self-processing: Taxpayers may process the reconciliation themselves.

Ÿ   Through the Employer (Including Entities that Withhold and Prepay Taxes on Labor Remuneration):

If taxpayers request their employer to handle the reconciliation, the employer should process it or train and assist the taxpayer in completing the reconciliation and handling the tax refund or payment.

Taxpayers should confirm their request for assistance with their employer in writing or electronically in advance and provide information about income from other sources of comprehensive income earned in 2023, relevant deductions, tax benefits, etc., and take responsibility for truthfulness, accuracy, and completeness of the submitted information. If taxpayers do not confirm their request with their employer, the employer is not allowed to handle the reconciliation.

Ÿ   Through an Authorized Representative (including tax professional service organizations or other entities and individuals): Taxpayers must sign an authorization letter with the representative.

After the employer or authorized representative completes the reconciliation on behalf of the taxpayer, they must promptly inform the taxpayer of the status. If the taxpayer discovers errors in the reconciliation information, they may request the employer or representative to correct it or may correct it themselves.

7.     Processing Channels

To facilitate taxpayers, tax authorities provide efficient and convenient online tax filing channels. Taxpayers are encouraged to use the Individual Income Tax APP and websites to process the reconciliation. The tax authorities will provide pre-filled information for the declaration forms. If these methods are inconvenient, taxpayers can also process their filings by mail or visit the tax service office.

For mail submissions, taxpayers should send the declaration form to the address provided by the tax bureau of the province, autonomous region, municipality directly under the central government, or a separately planned city, as outlined in Section 9 of this announcement.

8.     Retention of Declaration Information and Documents

Taxpayers who process their reconciliation using the applicable individual income tax annual self-reporting form (Appendices 2 and 3) must check and ensure the information provided is true, accurate, and complete. If modifications to personal information are needed or if new deductions or tax benefits apply, taxpayers must also report the related information and provide supporting materials.

Taxpayers and the entities handling the reconciliation on their behalf must each retain the documentation related to special additional deductions, tax benefits, and other relevant materials for five years starting from the end of the reconciliation period.

Entities handling equity (stock) incentives (including stock incentives with foreign companies as the target for employees) or cash rewards for the transformation of professional technological achievements must report and file them according to relevant regulations. If taxpayers receive multiple equity incentives from the same entity in one tax year, the entity should combine the calculations for tax withholding. If taxpayers receive equity incentives from different entities in one tax year, they may either provide the information from the previous entities to the current entity for combined withholding tax calculation or process a combined declaration with the tax authorities between March 1 and June 30 of the following year.

9.     Tax Authorities Accepting Declarations

According to the principle of convenience, taxpayers who handle the reconciliation themselves or through a representative should submit their declaration to the tax authority where their employer's main tax authority is located. If a taxpayer has more than one employer, they may choose to submit to one of the employers' tax authorities.

For taxpayers with no employer, they should submit the declaration to the tax authority at their place of household registration, primary residence, or the main source of income in 2023. The main source of income refers to the location of the withholding agent who paid the highest cumulative amount of labor remuneration, manuscript fees, and royalties in 2023.

For taxpayers with their reconciliation handled by the employer, they should submit it to the employer's main tax authority.

For tax services and collection management convenience, after the reconciliation period ends, tax authorities will designate the main tax authority for taxpayers who have not filed their reconciliation or who need to consolidate multiple equity incentive filings.

10.  Tax Refund (or Supplementary Tax)

(1)   Tax Refund Processing

Taxpayers who apply for a tax refund following the reconciliation should provide a qualified bank account within China. After the tax authority reviews the application in accordance with regulations, the tax refund will be processed based on the relevant treasury management rules. If taxpayers fail to provide a valid bank account or if the provided information is incorrect, the tax authority will notify the taxpayer to make corrections. After the corrections are made, the refund will be processed in accordance with the law.

To facilitate the tax refund process, taxpayers whose total comprehensive income in 2023 does not exceed 60,000 yuan and who have already prepaid individual income tax may choose to use the simplified declaration function provided by the individual income tax APP or website for a more convenient refund process.

Taxpayers applying for tax refunds for the 2023 reconciliation year, as well as other refunds, who should have completed supplementary tax payment for 2022 or earlier years but failed to do so, or who were notified by the tax authorities that their reconciliation declarations for 2022 or earlier years had discrepancies but did not correct or explain the situation, must complete the supplementary tax payment, corrected declarations, or explanation for those prior years before applying for a refund.

(2)   Supplementary Tax Payment Processing

Taxpayers who need to pay supplementary taxes following the reconciliation may make payments via online banking, POS card payments at tax service halls, bank counters, non-bank payment institutions, etc. For those submitting by mail and paying supplementary taxes, taxpayers should monitor the declaration progress and make the payment promptly via the individual income tax APP or website or at the tax service hall of the competent tax authority.

If a taxpayer fails to declare or pay the full supplementary tax after the reconciliation period ends, the tax authority will, upon discovery, order the taxpayer to make corrections within a specified time and send relevant tax documents to the taxpayer. For those who have signed the "Electronic Tax Document Delivery Confirmation", these documents will be delivered electronically via the individual income tax APP or website; for those who have not signed, the documents will be delivered via other means. Additionally, the tax authority will apply late payment penalties and mark the taxpayer's income tax "tax record".

If taxpayers make errors in filling out their declaration, leading to an over-refund or underpayment of taxes, and they correct the errors promptly either on their own initiative or after being reminded by the tax authority, the tax authority will, in accordance with the "first violation no penalty" principle, refrain from imposing penalties.

11.  Reconciliation Services

The tax authority has launched a series of service optimization measures, strengthening policy interpretation and operational guidance for reconciliation, preparing categorized tax filing guidelines, providing simplified explanations of policy terminology and operational procedures, and offering multi-channel reminder services. Taxpayers can receive tax consultation via channels such as the individual income tax APP and website, the 12366 tax service platform, and others, helping to resolve any issues and responding actively to taxpayer needs.

Before the reconciliation begins, taxpayers can log into the individual income tax APP or website to check their comprehensive income and tax status, verify basic information such as bank card details and the identity information of those eligible for special additional deductions, and prepare for the reconciliation.

To guide taxpayers in an orderly manner and improve their experience, the competent tax authorities will notify taxpayers in batches to complete their reconciliation within designated timeframes. Additionally, the tax authority has introduced an appointment service. Taxpayers with reconciliation needs during the early period (from March 1 to March 20) can make an appointment through the individual income tax APP after February 21 for any day within that period. From March 21 to June 30, taxpayers can handle the reconciliation at any time without appointment.

For taxpayers who are eligible for a tax refund and have significant life burdens, the tax authority provides priority refund services. For special groups such as the elderly or those with mobility challenges, if they have difficulty completing the reconciliation independently, they may apply for personalized convenience services.

12.  Other Matters

In cases where Articles 1 and 4 of the "Announcement of the State Taxation Administration on Relevant Issues Regarding Individual Income Tax Self-Declaration" (Announcement No. 62 of 2018) are inconsistent with this Announcement, the provisions of this Announcement shall prevail.

According to the "Announcement of the Ministry of Finance, the State Taxation Administration, and the Ministry of Housing and Urban-Rural Development on Extending the Implementation of the Personal Income Tax Policy to Support Residents in Purchasing Housing" (Announcement No. 28 of 2023), during the period from January 1, 2024, to December 31, 2025, taxpayers who sell their own homes and purchase a new home within one year in the same city may apply for a refund of the individual income tax paid on the sale of the original home, subject to the relevant service and tax administration rules outlined in the "Announcement of the State Taxation Administration on the Tax Administration Matters Concerning the Personal Income Tax Policy Supporting Housing Purchases" (Announcement No. 21 of 2022).

This announcement is hereby given.

Attachments:

1.     Personal Income Tax Rate Table (for Comprehensive Income)

2.     Personal Income Tax Annual Self-Declaration Form (Form A, Simplified Version, Q&A Version)

3.     Personal Income Tax Annual Self-Declaration Form (Form B)

(https://fgk.chinatax.gov.cn/zcfgk/c100012/c5221099/content.html)

State Taxation Administration

January 31, 2024

Attachment 1: Individual Income Tax Rate Table (Applicable to Comprehensive Income)

Interpretation of the "Announcement of the State Taxation Administration on Handling the 2023 Individual Income Tax Comprehensive Income Reconciliation Matters"

In order to implement the deployment of the Central Economic Work Conference, effectively safeguard taxpayers' legitimate rights and interests, and assist taxpayers in completing the 2023 individual income tax comprehensive income reconciliation (hereinafter referred to as the reconciliation) in a smooth and standardized manner, the State Taxation Administration (STA) has issued the "Announcement of the State Taxation Administration on Handling the 2023 Individual Income Tax Comprehensive Income Reconciliation Matters" (hereinafter referred to as the "Announcement"), after fully listening to the opinions and suggestions from taxpayers, withholding agents, experts, scholars, and the general public. The interpretation of the Announcement is as follows:

I. What is the basic framework and main content of the "Announcement"?

The implementation of the new individual income tax law in 2019 marked the establishment of a combined comprehensive and classified individual income tax system in China. The new tax law requires taxpayers to summarize and combine four types of comprehensive income—wages and salaries, labor remuneration, royalties, and licensing fees—at the end of the year, and reconcile with the tax authorities to settle any tax refunds or supplementary payments. Thanks to the joint efforts of taxpayers, withholding agents, intermediary agencies, relevant departments, and other sectors of society, the previous four reconciliations have been carried out smoothly and in an orderly manner, continuously improving the stability and convenience of the reconciliation system. Therefore, based on the overall continuation of the basic framework and main content of the previous four reconciliation announcements, the "Announcement" further optimizes taxpayer services and provides reminders on common errors in the reconciliation process, making it easier and more accurate for taxpayers to complete the reconciliation.

The "Announcement" consists of twelve articles. Articles 1 to 4 mainly clarify the content of the reconciliation, situations where reconciliation is not required, situations where reconciliation is required, and the tax deductions that taxpayers may enjoy, including special additional deductions and other pre-tax deductions. Articles 5 to 9 primarily specify the reconciliation handling time, methods, channels, information declaration and data retention, the accepting tax authorities, and related matters. Article 10 outlines the specific procedures and requirements for handling tax refunds (or supplementary tax payments). Article 11 explains the taxpayer services provided by the tax authority, including tax appointment services and priority tax refunds. Article 12 mainly clarifies the applicability of relevant provisions.

II. What are the main changes in the "Announcement" compared to previous years?

The "Announcement" generally continues the framework and content of the previous reconciliation announcements. The main changes are as follows:

1.     Extension of the Confirmation Time for Delegated Reconciliation Handling

In Article 6, "Handling Methods," the confirmation time for taxpayers who require delegation has been further extended. Taxpayers are no longer required to confirm their delegation relationship with their employer before April 30. This adjustment allows more time for both taxpayers and employers to handle the reconciliation process.

2.     Adjustment Regarding Stock Option Incentives and Taxation

In Article 8, "Declaration Information and Data Retention," according to the "Announcement of the Ministry of Finance and State Taxation Administration on Continuing the Implementation of Individual Income Tax Policies for Stock Incentives for Listed Companies" (Announcement No. 25, 2023), the separate taxation policy for stock incentives has been extended until the end of 2027. If taxpayers receive stock incentives more than once (including twice) within a tax year, they are required to combine the calculation of their tax. In order to facilitate taxpayers, the "Announcement" clarifies the method, time, and place for the combined reporting of multiple stock incentives.

3.     Clarification of Tax Document Delivery Requirements for Supplementary Tax Payments

In Article 10, "Tax Refunds (or Supplementary Tax Payments)," the "Announcement" further clarifies the delivery requirements for tax-related documents to taxpayers who fail to report and pay their supplementary taxes in full. This is to urge taxpayers who have not completed their tax obligations to fulfill their duties in accordance with the law.

4.     Improvement of the Appointment-Based Tax Filing System

In Article 11, "Reconciliation Services," the appointment-based tax filing system has been further improved. Considering that this year's Spring Festival holiday is later than usual, the starting date for tax filing appointments has been adjusted to February 21.

III. What new service optimization measures have been introduced for this year's reconciliation?

On the basis of continuous optimization of taxpayer services, this year's reconciliation introduces the following convenient measures:

1.     Expansion of Priority Tax Refund Service

For taxpayers with an annual income of 60,000 yuan or less, who have already prepaid individual income tax, the "Announcement" further expands the priority tax refund service. In addition to the simplified reporting services previously provided through the Personal Income Tax APP and the Individual Electronic Tax Bureau website, this year, priority tax refunds will be offered to enhance taxpayers' sense of satisfaction.

2.     Expansion of Pre-Fill Service for Reconciliation Declaration Items

Based on data shared by the National Medical Insurance Administration and the Ministry of Human Resources and Social Security with the tax authorities—such as medical expenses and individual pension data—the "Announcement" provides pre-filled services for major medical special additional deductions and individual pension information. This aims to provide taxpayers with a better filing experience.

3.     Improvement of the Personal Income Tax APP User Experience

The Personal Income Tax APP has been upgraded with a new version that restructures the channel pages, redesigns function icons to avoid overlapping business functions, and integrates filing and inquiry services. The "to-do" reminders are more prominent, enhancing the user experience for taxpayers.

IV. What supervisory measures are in place for taxpayers who fail to complete their reconciliation in accordance with the law this year?

From recent years' reconciliation situations, most taxpayers have truthfully reported income and deductions, fulfilling their tax obligations in accordance with the law. However, the tax authorities have found a small number of taxpayers who falsify or incorrectly report income or deductions to either receive an excessive tax refund or reduce the amount of tax paid. This year, the following supervisory measures will be strengthened:

1.     Strengthening Supervision on Incorrect Reporting of Special Additional Deductions

For taxpayers who fail to report special additional deductions in accordance with regulations—such as both spouses separately claiming the full 100% deduction for children's education or falsifying documentation to claim the major medical special additional deduction—once discovered, the tax authorities will remind taxpayers through the Personal Income Tax APP, website, or the withholding agents. Taxpayers claiming new deductions or tax benefits must report the related information and provide supporting materials. If a taxpayer refuses to correct or explain the situation, the tax authorities will suspend their eligibility for the special additional deductions in accordance with the "Announcement of the Ministry of Finance and State Taxation Administration on Tax Policy Issues Related to Comprehensive Income Tax Reconciliation" (Announcement No. 94, 2019). Once the taxpayer corrects the information or provides an explanation, they may continue to enjoy the special deductions.

2.     Strengthening Supervision on Taxpayers Who Fail to Report or Fully Pay Supplementary Tax

For taxpayers who need to pay supplementary tax, if they fail to report or fully pay the tax after the reconciliation period ends, the tax authorities will send a tax document through the Personal Income Tax APP, website, or other electronic channels. Taxpayers will be ordered to correct their errors by a specified deadline, and a late fee will be added. The overdue tax payment will also be noted in their personal income tax record.

Taxpayers are encouraged to file their individual income tax reconciliation truthfully and take full responsibility for the authenticity, accuracy, and completeness of the information submitted. In cases of serious violations such as falsified reports or altered supporting documents, the tax authorities will deal with the offenders seriously, include them in the tax supervision focus list, and strengthen reviews of their tax filings over the next three years. For severe cases, the tax authorities will initiate investigations in accordance with the law.

（https://fgk.chinatax.gov.cn/zcfgk/c100015/c5221102/content.html）

Income Tax Department

January 31, 2024

The Supreme People’s Court Releases Six Typical Cases on Liability for Animal Damage (February 5, 2024)

In recent years, as the quality of life for the general public continues to improve, pet ownership has become an increasingly integral part of many people's lives. Specifically, in terms of dog ownership, statistics show that in 2022, the number of dogs in urban areas of China reached 51.19 million. Dogs bring joy to people's daily lives and, to some extent, serve as companions for emotional support. However, at the same time, some dog owners and managers lack awareness of civility, safety, and responsibility, and fail to properly manage their dogs. This has led to issues impacting others’ lives in terms of hygiene, peace, and safety, which have sparked conflicts and disputes. Particularly, with the growing number and diversity of dog breeds, incidents of dogs injuring people have occurred frequently in recent years. Therefore, balancing the joy of dog ownership with the safety of it is a crucial issue in social governance and an important area of focus in the development of the rule of law.

The People’s Courts place great emphasis on using legal thinking and methods to address conflicts and disputes caused by damage caused by dogs. On one hand, the courts accurately apply relevant laws and regulations, such as the Civil Code of the People’s Republic of China (hereinafter referred to as the Civil Code), to enforce the legal obligations and responsibilities of dog owners and managers, fostering awareness and habits of civilized and compliant dog ownership through legal accountability. On the other hand, in line with the rule of law’s principle of addressing issues early, the courts support administrative agencies in their law enforcement activities related to civilized and safe dog ownership, fully utilizing the advantages of proactive administrative management to effectively prevent incidents of dog-related damage. This release includes six typical cases on animal damage liability to the public. Of these, five are civil litigation cases, and one is an administrative litigation case. Through these cases, the goal is to achieve the following outcomes:

1.     Ensuring civilized and compliant dog ownership

The Civil Code, the Public Security Administration Punishment Law of the People’s Republic of China, the Animal Epidemic Prevention Law of the People’s Republic of China, and relevant local regulations and rules stipulate the duties that dog owners and managers must fulfill. For example, when taking a dog outside, it must be leashed, and minors are prohibited from walking dogs alone. However, in practice, there are instances where owners fail to leash their dogs in public areas within residential communities, allowing their dogs to roam freely, or permit minors to walk dogs on their own. In Case 2, Mr. S allowed his 7-year-old child, Mr. O, to walk the dog alone, resulting in the child failing to avoid a baby under 1 year old, leading to the baby being injured by the dog. In Case 3, the large black dog owned by Mr. Z chased the electric bicycle of Mr. Z, causing Mr. Z to be startled and fall, resulting in injury. These cases reflect the owners' mistaken belief that their dogs would not harm others and also highlight their lack of knowledge and understanding of relevant laws and regulations on dog ownership. These cases aim to help dog owners and managers realize that even the "cute and lovable" dogs are potential "mobile hazards" and that they must seriously learn and understand the laws and regulations on animal ownership to ensure civilized, compliant, and safe dog ownership, thereby enjoying the pleasures of being with their dogs with peace of mind.

2.     Strengthening Awareness of Responsibility and Accountability in Dog Ownership

Failure to properly manage or control dogs in accordance with regulations results in legal liability for dog owners and managers, including civil liability, typically in the form of monetary compensation, and administrative liability, such as the confiscation of the dog. In terms of civil liability, the courts accurately identify the form of infringement, define the types of damages, and appropriately determine compensation responsibilities based on specific circumstances and losses caused by dogs. In Case 1, Mr. Liu owned a large dog that was prohibited in the local area, which caused harm to others. Although the victim, Mr. Xu, had engaged in behavior that could provoke the dog, the court correctly applied the Civil Code Article 1247, which stipulates the "strictest no-fault liability" rule, determining that the owner of a dangerous animal, such as a prohibited breed, is fully liable for any damage caused, regardless of the victim’s fault. This case highlights the principle that banned dog breeds must not be kept. In Case 4, after Mr. An was bitten by a dog owned by Mr. M and had to undergo rabies vaccination, resulting in a miscarriage, the court determined that the damage was caused by Mr. M’s dog and ordered Mr. M to compensate for the losses, thereby providing comprehensive protection for the victim.

Regarding administrative responsibility, in Case 6, Mr. Wang violated local dog management regulations by keeping 11 unlicensed dogs without leashes at his stall. Despite being ordered by the police to correct the situation, he did not comply. The police then confiscated the dogs and transferred them to a shelter. In the administrative litigation, where Mr. Wang requested the court to revoke the police’s actions, the court rejected his request, strongly supporting the lawful actions of the police and reinforcing the notion that dog ownership is not a trivial matter, thus preventing further damage caused by dogs. In these judicial cases, the courts have utilized various legal mechanisms to protect the rights of the victims, promoting the concept that dog owners are responsible and fostering a legal awareness of accountable dog ownership.

3.     Creating a Strict Enforcement and Law-Abiding Atmosphere for Dog Ownership

After a dog-related injury incident, although the courts can order the owner or manager to bear responsibility, the damage has already occurred, and the rights of the victim have been violated. Simply assigning liability through judicial rulings does not address the underlying issue. To prevent and eliminate dog-related damages, efforts should focus on managing the issue proactively, strengthening oversight, and creating a collaborative effort to ensure that the approach to dog ownership is comprehensive, achieving the goal of “handling one case, managing the wider area.” In Case 6 mentioned earlier, the police lawfully took prompt action against Mr. Wang’s illegal dog ownership, and the courts firmly supported the police's enforcement actions, preventing any further damage. This approach has been widely praised by the public, demonstrating the significance of targeted measures and root cause management.

In Case 5, the court invited members of the National People's Congress and relevant organizations to observe the trial of a dispute between Mr. Bao and Mr. Zhang. After clarifying the facts and responsibilities, the court strengthened mediation, with the assistance of the NPC representatives and relevant units. Ultimately, both parties reached a mutual understanding and signed a settlement agreement, which was immediately implemented. This collaborative mediation by the courts and relevant departments not only resolved the case but also guided the parties on how to comply with dog ownership regulations, helping to resolve personal disputes and fostering a strict enforcement and law-abiding atmosphere. This case highlights the collaborative efforts of all parties involved, creating a law-abiding environment for dog ownership and advancing the modernization of social governance.

The report of the 20th National Congress of the Communist Party of China pointed out that the essential requirements of Chinese-style modernization include enriching the spiritual world of the people and promoting harmonious coexistence between humans and nature. Guided by Xi Jinping’s Thought on Socialism with Chinese Characteristics for a New Era, the People’s Courts will deeply implement Xi Jinping's legal thought, support and serve Chinese-style modernization with judicial work, and collaborate in creating a civilized, peaceful, orderly, and safe living environment. The courts will continue to utilize legal measures to address dog ownership governance effectively, meet the growing needs of the people for a better life, and provide strong judicial guarantees for enhancing people's well-being and advancing the modernization of the national governance system and capacity.

Typical Cases of Animal Damage Liability for Animal Owners

Case 1: Damage caused by a prohibited large dog, with the owner and manager bearing full liability for compensation – Xu v. Liu, Animal Damage Liability Dispute Case

Case 2: Allowing a minor to walk a dog, causing damage, with the owner and manager bearing liability for compensation – Hong v. Ou & Si, Animal Damage Liability Dispute Case

Case 3: A dog chasing a passerby causing them to panic and fall, with the owner and manager bearing liability for compensation – Zhang A v. Zhang B, Animal Damage Liability Dispute Case

Case 4: A pregnant woman bitten by a dog resulting in the termination of her pregnancy, with the owner and manager bearing liability for compensation – An v. Miao, Animal Damage Liability Dispute Case

Case 5: Damage caused by a dog, with responsibility for compensation; court mediation promotes harmony – Zhang v. Bao, Animal Damage Liability Dispute Case

Case 6: Violating dog ownership regulations, should be denied and stopped – Wang v. Administrative Penalty for Illegal Dog Ownership by Public Security Organs

1. Damage caused by a prohibited large dog, with the owner and manager bearing full liability for compensation – Xu v. Liu, Animal Damage Liability Dispute Case

[Case Background]

Liu raised an Alaskan Malamute, which, according to the local "Urban Dog Management Regulations," is classified as a prohibited large dog in the city. In August 2019, 7-year-old Xu, while playing in a residential area with his grandmother Wang, encountered Liu, who was walking the dog. While Xu and Wang were playing with the dog, it suddenly scratched Xu's face. Xu was taken to the hospital by his family and required hospitalization for treatment. Despite efforts to negotiate compensation with Liu, no agreement was reached, prompting Xu to file a lawsuit for reimbursement of medical expenses, food allowances during hospitalization, transportation fees, and nursing fees, totaling 33,010.18 yuan.

[Court Judgment]

The court found that animal owners, while enjoying the pleasure of raising animals, are required to assume a higher level of responsibility in managing the animals. They must strictly adhere to relevant regulations to prevent animals from posing a danger to the health and safety of others, thereby maintaining a safe living environment and public order. According to Article 80 of the Tort Liability Law of the People's Republic of China (now Article 1247 of the Civil Code), if a prohibited dangerous animal, such as a vicious dog, causes harm to others, the owner or manager of the animal shall be liable for the damages. This article establishes that the owner or manager of a dangerous animal bears strict liability, with no right to reduce or excuse responsibility. If the owner or manager violates regulations by keeping a prohibited dangerous dog, they bear a significant subjective fault and should be held responsible for the harm caused. According to the city’s "Urban Dog Management Regulations" Article 4, "Small dogs are allowed, medium dogs are restricted, and vicious or large dogs are prohibited." In this case, the Alaskan Malamute kept by Liu is a large dog prohibited by the city, and it caused harm to Xu. Liu is thus liable for compensating Xu for the reasonable costs incurred as a result. Although Xu was partly at fault for provoking the dog, this did not reduce Liu's responsibility. The court ultimately ruled that Liu should compensate Xu for damages amounting to 30,197.65 yuan.

[Significance of the Case]

The liability for harm caused by prohibited dangerous animals, such as vicious or large dogs, differs from general cases of dog-related damage, both in terms of applicable laws and the distribution of the burden of proof. The owner or manager of a prohibited dangerous animal bears strict liability with no possible defenses to reduce or exempt their responsibility. This case clarifies that owners of prohibited large dogs must fully compensate for the reasonable costs incurred by the victim. It serves to enforce the legal and social responsibilities of animal owners and managers, guiding them to adhere to the law and fostering a civilized and regulated approach to dog ownership. The judgment promotes the creation of a safe and comfortable living environment and contributes to the development of a harmonious and civilized city.

2. Allowing a minor to walk a dog and causing harm to others, with the owner and manager bearing liability for compensation – Hong v. Ou, Si, Animal Damage Liability Dispute Case

[Case Background]

Si raised a black Dachshund. In August 2021, Si allowed his minor son, Ou (7 years old), to walk the dog near the east gate of a residential complex. While walking the dog, Ou did not avoid other children, and the dog scratched the left foot of Hong (a baby under 1 year old). After the incident, Hong’s family called the police, and the dog was seized by the public security authorities. The police determined that Si violated the local "Dog Management Regulations," which state that "when walking a dog outside, the dog must be leashed and led by an adult. The dog owner should carry the dog registration certificate and must avoid elderly people, disabled persons, pregnant women, and children." Since the violation was deemed serious, Si was administratively punished, and the dog was confiscated. Hong was taken to a children's hospital, where the doctor administered a rabies vaccination. After failed attempts to negotiate compensation with Si, Hong’s family filed a lawsuit, requesting that Ou and Si pay for medical expenses, transportation costs, and other expenses.

[Court Judgment]

The court held that Si, as the owner and manager of the dog involved in the case, was at fault for allowing his minor son to walk the dog, which led to Hong being scratched on the left foot. There was a direct causal relationship between Si's actions and Hong's injury, and therefore, Si should bear the responsibility for compensating Hong’s losses. The court supported Hong’s claims for medical expenses, transportation costs, and other related expenses. The final judgment was that Si should pay a total of 3,092 yuan in compensation to Hong.

[Significance of the Case]

This case serves as a typical warning in dog-related injury cases, especially for dog owners. Some dog owners may become overly confident, thinking "my dog is very cute and well-behaved, it won’t bite," and thus let their guard down. Allowing a minor to walk a dog on their own can turn the dog into a "moving hazard." The lack of attention from the owner and manager, coupled with their disregard for relevant laws and regulations, ultimately resulted in harm to the victim. This not only caused physical and mental damage to the young victim but also led to financial loss for the owner, who could even lose the opportunity to keep their dog. While the dog was technically the one causing the injury, the real issue lies in the management of the dog by the owner and manager. To prevent similar situations, dog owners must follow regulations and ensure that minor family members are educated about the risks associated with dogs. It is essential to foster a risk-aware mindset and work together to practice safe, lawful, and civilized dog ownership and walking. Only by doing so can we achieve harmony between humans and animals.

3. A dog chasing a passerby causing them to be frightened and fall, with the owner and manager bearing liability for compensation – Zhang v. Zhang, Animal Damage Liability Dispute Case

[Case Background]

In November 2018, Zhang A was riding an electric bicycle along a road in a village when a large black dog owned by Zhang B began chasing the bicycle, causing Zhang A to be frightened and fall, injuring his knee joint. The police were called to the scene, and after their coordination, Zhang B’s family took Zhang A to the hospital for treatment. After assessment, it was determined that Zhang A had sustained a grade 10 disability to his knee joint. Zhang A filed a lawsuit seeking compensation for various losses amounting to 212,915.63 yuan (excluding the 12,080 yuan already paid by Zhang B).

[Court Judgment]

The court held that the danger posed by animal ownership is not limited to direct physical contact leading to injury. Causing others to be frightened also constitutes a dangerous situation. There was a causal relationship between the injury sustained by Zhang A and the fright caused by Zhang B’s dog. Zhang B, as the dog’s owner, failed to fulfill his duty of management. Since Zhang B could not prove that Zhang A acted intentionally, Zhang B should bear full liability for the damages. The court ruled that Zhang B should pay a total of 211,264.63 yuan in reasonable expenses to Zhang A (with 12,080 yuan already paid, leaving 199,184.63 yuan to be paid).

[Significance of the Case]

The behavior of a pet causing harm to others is not limited to direct physical contact such as biting or scratching. In certain situations, behaviors such as barking, sniffing, or chasing others can cause panic, leading to bodily harm. Even if the dog does not physically contact the person, as long as there is a causal relationship with the harm caused, it still falls under "damage caused by a pet," and the owner should bear corresponding responsibility. This case serves as guidance for handling "non-contact injury" cases involving pets. In everyday life, pet owners and managers should enhance their awareness of control. When dogs are outside, they should be properly managed and controlled to ensure the safety of themselves and others, taking full responsibility for personal and property safety.

4. A pregnant woman suffers a dog bite and terminates her pregnancy; the owner and manager bear liability for compensation – An v. Miao, Animal Damage Liability Dispute Case

[Case Background]

In December 2017, An was bitten by a dog owned by Miao in a residential area. An went to the hospital to receive a rabies vaccine, and Miao paid for the vaccine. Later, An discovered that she was pregnant at the time of the vaccination. After consulting with various hospitals and experts, An decided to terminate the pregnancy to avoid any potential harm to the fetus. This decision caused An both physical and emotional distress. An believed that Miao had failed to adequately supervise the dog, leading to the bite, and that the rabies vaccination and subsequent pregnancy termination were legally linked. As a result, An requested compensation from Miao for the costs incurred due to the termination of the pregnancy. Miao argued that receiving the rabies vaccine did not necessarily cause fetal development issues, and that she was unaware of An’s pregnancy. Therefore, Miao claimed that An should bear the consequences of terminating the pregnancy after the vaccine injection. After unsuccessful negotiations, An filed a lawsuit, requesting compensation for medical expenses, lost wages, nutrition costs, transportation costs, and emotional distress.

[Court Judgment]

The court found that Miao’s dog bit An, and Miao failed to prove that An acted intentionally or with gross negligence. Therefore, Miao should bear responsibility for the damages caused by the bite. After the bite, An received the rabies vaccine, and upon discovering her pregnancy, she decided to terminate the pregnancy due to concerns that the vaccine could negatively impact the fetus. The court ruled that this decision was a normal reaction based on An's living environment and common medical knowledge. Therefore, the court supported An’s claims for reasonable expenses, including those related to the termination of the pregnancy, such as medical fees, lost wages, nutrition costs, transportation, and emotional distress. The final judgment was that Miao should compensate An for a total of 6,069 yuan in damages.

[Significance of the Case]

This case serves as a typical example of a dog bite causing subsequent consequences, including pregnancy termination. Although there is no conclusive medical evidence regarding the effect of rabies vaccination on fetal development, the vaccine’s usage warnings indicate potential risks. Additionally, having a healthy child is one of the most basic expectations for parents, and terminating a pregnancy after discovering it while undergoing rabies vaccination aligns with normal human understanding. When establishing the causal link between the dog bite, the rabies vaccination, and the pregnancy termination, the court considered not only expert medical opinions but also general social understanding and ethical considerations. The court emphasized the social value of the judgment and the importance of guiding legal decisions in a manner that reflects societal norms. Therefore, the causal relationship between the dog bite, the rabies vaccination, and the pregnancy termination is legally recognized, and the damages arising from the pregnancy termination fall within the scope of the dog owner’s liability. This ruling provides comprehensive protection of the victim’s legal rights and offers a valuable reference for analyzing causal relationships in similar cases.

5. Dog-caused Damage Leads to Liability, Court Mediation Promotes Harmony – Zhang v. Bao, Animal Damage Liability Dispute Case

[Case Background]

In December 2022, Zhang was riding a motorcycle past Bao’s house when two dogs owned by Bao chased and attacked him, causing Zhang to fall and suffer injuries. Zhang went to the hospital for examination and treatment. The hospital determined that Zhang had sustained a fracture. Zhang requested compensation for medical expenses and other losses from Bao, but Bao claimed there was no evidence proving that the two dogs belonged to him and refused to compensate. Zhang filed a lawsuit, seeking 36,000 yuan in compensation.

[Mediation Outcome]

On the day of the trial, the court invited local representatives and relevant units to observe the proceedings. After hearing the case, the court, based on the relevant evidence, determined that Bao was indeed the owner and caretaker of the two dogs. To resolve the dispute amicably, the court carried out mediation after establishing the facts and responsibilities of the case. Local representatives and relevant units assisted in the mediation process. Through persuasion and communication, Bao agreed to compensate Zhang 5,000 yuan, and Zhang accepted the offer. Both parties signed the mediation agreement that same day and fulfilled the terms of the agreement immediately.

[Significance of the Case]

In this case, Bao’s dogs chased and caused Zhang to fall, resulting in injuries, and Bao was held responsible for the damage. To efficiently protect Zhang’s rights, the court emphasized mediation after determining the facts and responsibilities. Local representatives and relevant units played an active role in this mediation process, helping both parties understand the importance of legally regulating dog ownership. On one hand, the representatives clarified the necessity of responsible dog ownership; on the other hand, they encouraged mutual understanding and fair loss-sharing between the parties. Through in-depth mediation, both parties recognized that dog ownership comes with responsibilities, and they expressed satisfaction with the court’s approach and outcome. Local representatives pledged to focus on strengthening the legal framework for dog ownership and management, while relevant units committed to using legal methods to address issues related to dog activities and management. The case concluded successfully, achieving a balance of political, social, and legal effectiveness.

6. Violation of Dog Ownership Regulations Should Be Denied and Stopped – Wang v. Public Security Bureau, Administrative Punishment for Illegal Dog Ownership Case

[Case Background]

Wang operated a dry goods stall at a local market and kept eleven dogs at the stall without a permit. Furthermore, the dogs were not restrained with leashes. The local public security bureau issued a "Notice of Correction" to Wang, stating that Wang was in violation of regulations for not registering the dogs and was ordered to correct the situation within 15 days. However, after receiving the notice, Wang still failed to register the dogs or restrain them with leashes. Following a public complaint, the police arrived at the scene and attempted to persuade Wang to comply, but this was unsuccessful. Wang was then taken to the police station for questioning. The police also contacted a local animal rescue center to assist in capturing the dogs and transporting them to the local stray dog shelter. After informing Wang of his rights to statement and defense, Wang chose not to make a statement or defense. The public security bureau then issued an "Administrative Punishment Decision," ordering the confiscation of the eleven unregistered dogs. Wang disagreed with the decision and filed an administrative lawsuit, requesting the revocation of the "Administrative Punishment Decision."

[Court's Judgment]

The court found that, according to Article 5, Paragraph 1 of the local "Dog Management Regulations," a registration system is required for dog ownership in key management areas. It stipulates that no unit or individual may keep unregistered dogs. Furthermore, Article 24, Item 1 restricts the number of dogs per household to one and prohibits the ownership of aggressive or large dogs. Articles 42 and 46 outline the penalties for violations, including criticism and mandatory correction for households owning more than one dog. If the violation is not corrected within the specified time, the excess dogs will be confiscated by the police. Therefore, the public security bureau had the authority to investigate and handle illegal dog ownership in its jurisdiction. In this case, Wang refused to correct the violation after being ordered to do so. Prior to issuing the punishment, the public security bureau had conducted a thorough investigation and confirmed the facts of Wang’s unregistered dog ownership, with sufficient evidence. Based on the aforementioned regulations, the public security bureau's decision to confiscate Wang's unregistered dogs was legally sound, and the punishment was appropriate. The public security bureau followed proper procedures, including investigation, informing Wang of his rights to statement and defense, and conducting the necessary legal steps before imposing the punishment. The court ultimately ruled to reject Wang’s lawsuit.

[Significance of the Case]

A harmonious environment encourages civilized dog ownership, and a law-abiding society supports legal dog ownership. In this case, the court, in its administrative jurisdiction, legally supported the public security bureau’s administrative punishment for Wang’s failure to fulfill his legal obligations regarding dog registration and supervision. This decision effectively prevented potential harm to the public from unrestrained dogs in public spaces. By addressing this violation, the case not only helps avoid potential damage caused by unregulated dogs but also promotes the message of responsible and civilized dog ownership.

Regulations on the Implementation of the Registration and Capital Contribution System under the Company Law of the People's Republic of China (Draft for Public Comments)

Article 1 In order to standardize the registration and capital contribution management of companies, guide shareholders to make rational capital contributions, maintain the safety of market transactions, continuously optimize the business environment, and effectively implement the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), these regulations are formulated.

Article 2 A limited liability company shall, in accordance with its articles of association, contribute its registered capital in full within five years from the date of establishment.

For a joint-stock company established by initiation or targeted fundraising, the promoters shall pay the full amount of capital for the shares they subscribe to.

For a joint-stock company publicly raised through public offering, the company shall pay in full the capital for the shares publicly raised when registering with the company registration authority and submit the capital verification certificate issued by a capital verification institution.

A limited liability company shall pay in full any newly subscribed registered capital within five years. A joint-stock company shall, after all shareholders have paid in full the capital for their shares, apply for the registration of changes in registered capital.

A limited liability company and a joint-stock company established by initiation or targeted fundraising are not required to submit a capital verification certificate when registering with the company registration authority.

Article 3 According to Article 266 of the Company Law, a three-year transition period is set, from July 1, 2024, to June 30, 2027. Companies established before the implementation of the Company Law, with a capital contribution period exceeding the period prescribed by the Company Law, shall make adjustments within the transition period.

A limited liability company established before the implementation of the Company Law, with a remaining contribution period of less than five years after July 1, 2027, does not need to adjust the contribution period; however, if the remaining contribution period exceeds five years, it shall be adjusted to five years within the transition period. The adjusted capital contribution period shall be recorded in the company’s articles of association and publicly disclosed through the National Enterprise Credit Information Publicity System.

A joint-stock company established before the implementation of the Company Law shall, within the three-year transition period, pay in full the capital for the subscribed shares.

Article 4 The company registration authority shall optimize and adjust the registration process for the capital contribution period and amount, simplify the required materials, improve the registration efficiency, strengthen information technology development, and enhance the convenience of online registration services.

Article 5 A company established before the implementation of the Company Law may, during the transition period, apply for a reduction in registered capital without reducing actual paid-in capital. If the following conditions are met, the company may publicly disclose the application for 20 days through the National Enterprise Credit Information Publicity System. If no objections are raised by creditors during the disclosure period, the company may proceed with the registration of capital reduction based on the application letter and commitment letter:

(i) There are no outstanding debts or the debts are significantly lower than the company's actual paid-in registered capital;

(ii) All shareholders commit to bearing joint and several liability for the company’s debts within the scope of their original subscribed capital;

(iii) All directors commit not to harm the company’s ability to fulfill its debts and continue its operations.

If the above conditions are not met, the company shall reduce its capital in accordance with Articles 224 and 225 of the Company Law.

Article 6 A limited liability company established before the implementation of the Company Law, which has not adjusted its capital contribution period during the transition period, may be required by the company registration authority to adjust its contribution period within ninety days. The contribution period shall not exceed five years from July 1, 2027.

Article 7 For companies established before the implementation of the Company Law, with a capital contribution period exceeding thirty years or a capital amount exceeding ten billion yuan, the company registration authority may, considering factors such as shareholders’ contribution capacity, main business projects, and asset scale, assess the authenticity of the registered capital. The company registration authority may request the company to provide a situation explanation, may organize industry professional institutions to conduct an evaluation, or may consult with relevant departments. If it is determined that the contribution period or amount exhibits significant anomalies, and with the approval of the provincial-level market supervision administration, the company registration authority may require the company to adjust the contribution period and amount within six months. The adjusted contribution period shall not exceed five years from July 1, 2027.

Article 8 Companies established before the implementation of the Company Law, which undertake major national strategic tasks, involve national economic and people’s livelihood matters, or concern national security and major public interests, may, with the approval of the competent department of the State Council or the people’s government at or above the provincial level, contribute capital according to their original contribution period.

The companies mentioned in the previous paragraph include all types of companies, such as private, foreign-invested, and state-owned enterprises.

Article 9 If a limited liability company is found to have an excessively high registered capital that contradicts common sense or the characteristics of the industry, or if it clearly lacks the ability to make actual capital contributions, violating the principle of authenticity, and contravenes laws, administrative regulations, or the decisions of the State Council, the company registration authority shall not register the company.

Article 10 In accordance with Article 40 of the Company Law, companies shall, within twenty working days from the formation of the information, disclose to the public through the National Enterprise Credit Information Publicity System the subscribed and paid-in capital amounts, methods of contribution, contribution dates, number of shares subscribed by the promoters, and any changes in shareholder or promoter equity or shares.

The company shall also upload materials related to shareholders’ actual contributions, such as the shareholder list and financial statements, to the National Enterprise Credit Information Publicity System.

Article 11 If a company established before the implementation of the Company Law has had its business license revoked, been ordered to close, or been dissolved, preventing the adjustment of registered capital, or if it cannot be contacted through the registered address or business premises and has been included in the list of abnormal business operations, the company registration authority shall manage it separately, make a special annotation in the National Enterprise Credit Information Publicity System, and disclose it to the public.

Article 12 The company registration authority shall adopt a "double random, one public" regulatory approach to conduct random checks on the publicized subscribed and paid-in capital information of companies. The registration authority should strengthen inter-departmental information sharing, implement hierarchical and categorized supervision based on the company’s credit risk status, and enhance the comprehensive application of the credit risk classification results.

Article 13 When intermediary institutions and their staff handle registration matters on behalf of companies, they must comply with legal and regulatory provisions, clearly indicate their agency status, avoid false advertising, refrain from using fraudulent, deceptive, or improper means to solicit business, and must not induce or assist clients in committing illegal activities such as falsely reporting registered capital, fake capital contributions, or capital withdrawal.

Article 14 If a company fails to adjust its contribution period or amount in accordance with Articles 6 and 7, the company registration authority shall make a special annotation in the National Enterprise Credit Information Publicity System and disclose it to the public.

Article 15 These regulations shall come into effect on July 1, 2024.

（https://www.samr.gov.cn/hd/zjdc/art/2024/art_f9f3f2d431474f0aa453786a9e5dd5cb.html）

Ministry of Industry and Information Technology, National Development and Reform Commission, Ministry of Finance, State Taxation Administration Notice on the Compilation of the List of Industrial Parent Machine Enterprises Eligible for the R&D Expense Super Deduction Policy for the Year 2023 (Gongxinbu Liantongzhuang Han [2024] No. 60)

To:

The departments of industry and information technology, development and reform, and finance (including bureaus) of all provinces, autonomous regions, municipalities directly under the central government, and cities specifically designated in the state plan, as well as the tax bureaus of the State Taxation Administration in these regions:

In accordance with the "Announcement of the Ministry of Finance, State Taxation Administration, National Development and Reform Commission, and Ministry of Industry and Information Technology on Increasing the Proportion of Super Deduction for R&D Expenses of Integrated Circuit and Industrial Parent Machine Enterprises" (Ministry of Finance, State Taxation Administration, National Development and Reform Commission, Ministry of Industry and Information Technology Announcement No. 44, 2023), and relevant provisions, this notice is issued to ensure the smooth compilation of the list of industrial parent machine enterprises eligible for the R&D expense super deduction policy for the year 2023. The following matters are hereby notified:

1. Industrial parent machine enterprises applying for the super deduction policy must meet all of the following conditions:

(1) The enterprise must be engaged in the production and sale of advanced industrial parent machine mainframes, key functional components, or CNC systems (referred to as advanced industrial parent machine products, as detailed in the attachment "Basic Standards of Advanced Industrial Parent Machine Products" of the Ministry of Finance, State Taxation Administration, National Development and Reform Commission, and Ministry of Industry and Information Technology Announcement No. 44, 2023);

(2) The average monthly number of R&D personnel involved in advanced industrial parent machine products, who have a labor contract or are employed through labor dispatch or hiring relationships, must account for no less than 15% of the enterprise's total average monthly workforce in 2023;

(3) The total R&D expenses in 2023 must account for no less than 5% of the enterprise's total sales (operating) revenue (the sum of revenue from main business and other business income);

(4) The income from the production and sale of the advanced industrial parent machine products specified in this notice must account for no less than 60% of the enterprise's total sales (operating) revenue in 2023, and the enterprise’s total revenue must be no less than 30 million yuan (inclusive).

2. Enterprises applying to be included in the list must log onto the website www.gymjtax.com by March 31, 2024, select the “Industrial Parent Machine Enterprises R&D Expense Super Deduction Policy Application Portal,” submit their application, generate a paper document sealed with the enterprise's official stamp, and submit it together with necessary supporting materials (both electronic and paper versions) to the local departments of industry and information technology (referred to as the local MIIT departments) in each province, autonomous region, municipality directly under the central government, city specifically designated in the state plan, and Xinjiang Production and Construction Corps.

3. The local MIIT departments, based on the enterprise's conditions (see Article 1 of this notice), should log onto the website www.gymjtax.com:8888 to perform a preliminary review of the enterprise's application information. The preliminary approval list should be submitted to the Ministry of Industry and Information Technology by April 15. For enterprises that do not pass the preliminary review, the reason for rejection should be noted in the system.

4. The Ministry of Industry and Information Technology will organize third-party organizations to conduct qualification verification based on the enterprise's application information. Based on the verification results and considering the status of key industries in the industrial parent machine value chain, the Ministry of Industry and Information Technology, National Development and Reform Commission, Ministry of Finance, and State Taxation Administration will jointly review and confirm the final list. Enterprises can check if they are included in the list after May 10 by accessing the information submission system.

5. Enterprises included in the list can determine on their own whether they meet the criteria when filing their next year's corporate income tax prepayment. If they meet the criteria, they may enjoy the preferential policy at the time of prepayment. During the annual tax filing, if the enterprise is not included in the 2024 list, it should pay the taxes as required, without any late payment penalties.

6. Local MIIT departments, in conjunction with the departments of development and reform, finance, and taxation, will strengthen daily supervision of enterprises on the list according to their respective responsibilities. During the supervision process, if any enterprise is found to have obtained tax reduction or exemption qualifications through false information, a joint investigation should be conducted in a timely manner and reported to the Ministry of Industry and Information Technology for re-verification. If it is determined that the enterprise does not meet the requirements, the Ministry of Industry and Information Technology, along with the National Development and Reform Commission, Ministry of Finance, and State Taxation Administration, will revoke the enterprise's eligibility for the policy, and the enterprise will be prohibited from applying for inclusion in the list for the next three years.

7. Enterprises are responsible for the authenticity of the materials and data they provide. The applying enterprise must sign a commitment letter, promising to accept legal and regulatory consequences in case of dishonesty during the application process, in accordance with relevant laws and regulations.

Attachment: List of Materials to be Submitted by Industrial Parent Machine Enterprises for the R&D Expense Super Deduction Policy

Ministry of Industry and Information Technology

National Development and Reform Commission

Ministry of Finance

State Taxation Administration

February 8, 2024