China

事关个人所得税！财政部、税务总局、证监会等三部门发布

STCN | Local Language | News | Jan. 23, 2026 | Regulation

On January 21, 2026, the Ministry of Finance, State Taxation Administration, and China Securities Regulatory Commission jointly announced the continuation of tax policies for the pilot domestic issuance of depositary receipts (CDRs) by innovative enterprises. From January 1, 2026, to December 31, 2027, individual investors will be temporarily exempt from personal income tax on price-differential gains from transferring CDRs of innovative enterprises.

During the same period, a differentiated personal income tax policy will apply to dividend income received by individual investors holding CDRs. Tax withholding and payment responsibilities fall on the domestic depositary institution, which must also file detailed reports with the tax authorities. Foreign tax credits may be granted for dividends already taxed abroad, according to relevant laws and bilateral tax treaties.

For corporate investors, price-differential gains and dividend income related to CDRs of innovative enterprises will follow existing enterprise income tax policies for share transfers and dividends. Public securities investment funds are temporarily exempt from enterprise income tax on these gains and dividends. Qualified foreign institutional investors (QFII) and renminbi qualified foreign institutional investors (RQFII) will treat such gains and dividends as income related to the transfer or holding of the underlying shares of the CDRs for enterprise income tax purposes.

The announcement defines "CDR of innovative enterprises" as securities issued domestically by a depositary based on overseas shares, meeting the pilot enterprise criteria set by the State Council and CSRC guidelines. These CDRs represent rights in the underlying overseas securities.

JunHe LLP | English | AcademicThink | Jan. 23, 2026 | Regulation

On January 20, 2026, a practical seminar on the World Bank’s newly revised "Integrity Compliance Guidelines" was successfully held, supported by the Expert Committee of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products and jointly hosted by JunHe Law Offices and Tianjin University's International Engineering Management School. The seminar concentrated on the World Bank’s December 2025 updates to the guidelines and common compliance errors among Chinese companies, gathering key representatives from the World Bank’s core investigation and compliance departments, compliance leaders from Chinese enterprises, and senior lawyers from multilateral development banks. The event aimed to provide a precise, in-depth compliance empowerment platform for Chinese companies involved in World Bank-financed projects.

The seminar was chaired by JunHe partner lawyer Zhou Xianfeng and featured welcome speeches from JunHe director Hua Xiaojun, China Chamber of Commerce deputy chairman Zheng Chao, and Tianjin University professor Zhang Shuibo. They collectively emphasized that multilateral development bank compliance standards form a critical foundation for improving Chinese companies' compliance levels in the current international market environment.

Key highlights included authoritative presentations from three core World Bank departments. Anthony Pan from the Integrity Compliance Office detailed critical updates in the new guidelines, including management responsibilities, technology usage compliance, accessibility of policies and records, anti-retaliation protections, and regulations on donations and sponsorships. Xuan Luo from the Integrity Vice Presidency addressed frequent compliance risks faced by Chinese companies in World Bank projects such as conflicts of interest, commissions, subcontracting, key personnel changes, and fraudulent disclosures, clarifying standards for collusion and corporate liability for employee misconduct. Chang Liu from the Office of Suspension and Debarment explained the World Bank’s sanctions framework, covering prohibited misconduct, recent case data, sanction measures, aggravating and mitigating factors, and cross-sanctions, providing a comprehensive overview of the system.

In a practical sharing session, JunHe partner Liu Zhen highlighted seven common misconceptions Chinese companies have about World Bank compliance requirements and offered actionable advice informed by recent policies and case examples. The closing session featured in-depth analyses on compliance system establishment and implementation from Yang Songlin, Chief Legal Counsel and Chief Compliance Officer of China Power Engineering Corporation, and Liu Yufei, Deputy Director and Acting General Manager of Compliance Management at China Power Construction Group International Engineering Company, enriching attendees with valuable insights.

JunHe’s experienced legal team continues to provide comprehensive compliance legal services to Chinese companies engaged in multilateral development bank projects, including risk assessments, internal investigations, audit cooperation, compliance system construction, and sanction lifting. The seminar reinforced JunHe’s commitment to supporting Chinese enterprises with multi-level compliance solutions as they expand globally.

Peoples Daily | English | News | Jan. 23, 2026 | South China Sea

On January 12, 2026, the China Coast Guard vessel Fuying dismantled illegally planted fish traps near Xianbin Jiao in the South China Sea. These fish traps are characterized by buoyant materials such as tires, foam, or iron barrels visible above water, with ropes extending dozens to over a hundred meters deep, adorned with tree branches to attract fish.

The small above-water size of these traps makes them difficult to detect, but they pose significant risks to sailing, as their ropes and branches can entangle ship propellers. Additionally, the materials used in the traps release tiny particles that can be absorbed by fish, posing threats to marine life and the environment.

The China Coast Guard has pledged to continue vigilant patrols to identify and immediately dismantle illegal fish traps in the area to ensure the safety of navigation and protect the ecological health of waters under China's jurisdiction.