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China Legal News
China's National People's Congress (NPC) Discusses Report on Water Pollution Control
China's National People's Congress (NPC), the country's top legislature, began discussing a report on water pollution prevention and control on Wednesday.

Zhou Shengxian, the Environmental Protection Minister, delivered the report at a plenary session of NPC Standing Committee.

The State Administration for Industry and Commerce issues New Rules on Capital Contribution with Equities
On 14 January, the State Administration for Industry and Commerce issued the Measures for Administration of the Registration of Capital Distribution with Equities (hereafter referred to as “Measures”), which comes into effect on 1 March, 2009. The Measures give the legal basis and clear guidelines for the registration of capital contribution in the form of equity transfer.

The Measures stipulates that the investor is permitted to make capital contribution into a PRC company established or to be established by transferring his equities in other PRC company. The transferred equities shall be clear in ownership, complete in terms of rights and transferable under the laws. The Measures also dedicates the situations where the equities shall not be transferred for capital contributions. The value of the foresaid transferred equities shall be appraised by qualified appraisers.

The Recycling Economy Promotion Law
The Recycling Economy Promotion Law, which comes into effect on January 1 2009, represents a significant step forward to an energy-saving and environmental-friendly society.

The law follows the "three Rs" (reduce, reuse, recycle) principle. The first R means reducing resource consumption and waste generation in the process of production, circulation and consumption. The second R means reusing waste and repairing, renovating or reproducing waste as products or components; and the last R directly using (recycling) wastes as raw materials or in waste regeneration.

Tax. Business Tax on Foreign Services
On November 10, 2008, the China State Council issued the amended Provisional Regulations of the PRC on Business Tax ("BT Regulations"). On December 15, 2008, the Ministry of Finance and the State Administration of Taxation ("SAT") issued the Implementation Rules of the Provisional Regulations of the PRC on Business Tax ("BT Rules"). Both the BT Regulations and the BT Rules will come into effect on January 1, 2009. The BT Rules reinterpret the scope of taxable services and impose business tax on foreign services.

According to these new regulations business tax is imposed on the provision of services and the transfer of intangibles and immovable properties within the territory of China. The business tax rate for most services is five percent of gross service fees. Previously, the interpretation was that the service provider would be liable for business tax only if the taxable services were performed within China.