Foreign Investment into Tobacco Industry Banned in China

The Ministry of Industry and Information Technology (MIIT) has recently issued regulations regarding retail of tobacco products in China. The new regulations stipulate that foreign invested commercial enterprises or individual business households are not permitted to engage in tobacco wholesale or retail business, nor engage in trading of tobacco monopoly products in alternative forms such as franchise, absorption of franchise stores or other re-investment, etc. The Measures for Administration of the Tobacco Monopoly License and Measures for Administration of Shipment Permit of Tobacco Monopoly Products will both become effective as of July 20, 2016.

Shanghai Issues Notice on the List of Automatic Preferential Tax Policies

Shanghai Municipal State Tax Bureau and Shanghai Municipal Local Tax Bureau has released a notice outlining and clarifying eight preferential tax policy matters which do not require additional materials to apply for. They are as follows:

• Deduction/reduction of VAT for purchase of special equipment for the VAT control system.
• Exemption of small sized and micro profit enterprises from VAT.
• Exemption of ticket income of science halls, natural museums, science & technology education bases and science & technology education activities from VAT.
• Exemption/reduction of enterprise income tax on qualified small sized and micro profit enterprises.
• Accelerated depreciation or remuneration for fixed assets or software purchased.
• Accelerated depreciation or one-off deduction of fixed assets.
• Preferential stamp tax during the restructuring process of an enterprise.
• Preferential stamp tax on loan contracts concluded between small sized and micro enterprises.

State Council Issues the Guiding Opinions on Cutting Overcapacity in the Non-Ferrous Metal Industry

The General Office of the State Council issued “Guiding Opinions on Creating a Favorable Market Environment to Promote Structural Adjustment, Transformation and Increases in Benefits in the Non-Ferrous Metal Industry (Opinions),” which addresses dealing with overcapacity problems in the non-ferrous metal industry. The Opinions consists of 15 articles, making detailed directives for key tasks and policy assurance, stressing that work should be done to cut overcapacity and disposal of surplus material in accordance with the laws and regulations, and guide the transfer of non-competitive capacity.

The Opinions states the key tasks as including: strict control of newly-added capacity and investigation and management of newly-built electrolytic aluminum projects in violation of the regulations; quickening of disposal of excess material, dealing with overcapacity in accordance with the laws and regulations and guiding the transfer of non-competitive capacity; stepping up technological innovation, pushing forward intelligent manufacturing and development of refined processing; expanding market applications, enhancing upstream and downstream cooperation and improving relevant product standards; improving reserves systems; actively promoting international cooperation, etc.