CIICGZ HR Information Briefing
August, 2009

Table of Contents:
1. Employment
1.1 Circular on Announcing Guide Line for Enterprise Wages of Guangdong Province in 2009
1.2 Guangzhou Municipal Government Issued Relevant Policies to Further Promote Employment Work for College Graduates 
1.3 Fourteen Departments of Guangdong Province Jointly Issued Implementation Opinion on Promoting Employment Policy for College Graduates 
2. Social Insurance and Housing Fund
2. 1 Guangdong Provincial Local Taxation Bureau and Guangzhou Municipal Local Taxation Bureau Will be In Full Charge of Collecting Social Insurance Premium
3. Frequently Used Certificates (no notification for the moment)
4. Tax Policy
4. 1The State Tax Administration Released Circular on Several Issues of Verifying and Levying Enterprises Income Tax
4. 2 Circular on Payment Deadline for Undeclared Tax
4. 3 Circular on Clarifying Several Policy Execution Issues of Individual Income Tax 
5. Others
5. 1 Remind: 2009 National Holiday and Mid-autumn Day Arrangement

Contents:
1.1 Circular on Announcing Guide Line for Enterprises Wages of Guangdong Province in 2009
Labor and Social Security Department of Guangdong Province announced 2009 guide line for enterprises wages of Guangdong Province on July 2009 as follows:
 a) Average increasing rate is 7%;
 b) Maximum increasing rate (Warning rate) is 12%;
c) Minimum rate is zero or negative growth.  
Relevant documents refer to: http://www.ciicgz.com/lawinfo.aspx?id=1067

1.2 Guangzhou Municipal Government Issued Relevant Policies to Further Promote Employment Work for College Graduates 
Guangzhou government issued Circular on Further Promoting Employment Work of College Graduates on July 31, 2009. The main contents are as follows:
a) Where large or intermediate state-owned enterprise accepts college graduates more than it did last year, and sign labor contract with a term over one year and pay for social insurance premium, the enterprises can get social insurance subsidies up to six months according to the actual exceeding number of employed graduates.
b) Where small and medium-size enterprises and non-public enterprises accept college graduates and sign labor contract with a term over one year and pay for social insurance, the enterprises can get social insurance subsidies up to six months according to the actual accepting number of employed graduates.
c) Where employer accepts extremely poor student or disabled college graduates and sign labor contract with a term over one year and pay for social insurance premium, the enterprises can get social insurance subsidies up to three years according to actual accepting number of employed graduates.
As the implementation rules of this policy have not been released yet, the specific operation procedures can not be confirmed. But we will follow up this issue.
Relevant documents refer to http://www.ciicgz.com/lawinfo.aspx?id=1069

1.3 Fourteen Departments of Guangdong Province Jointly Issued Implementation Opinion on Promoting Employment Policy for College Graduates
The Organization Department of Chinese Communist Commission of Guangdong Province, Labor and Social Security Department of Guangdong Province, Education Department of Guangdong Province, Science and Technology Department of Guangdong Province and so on jointly issued Opinion on Implementing Circular of General Office of People’s Government of Guangdong Province regarding Promoting Employment Work of General College Graduates(Hereinafter referred to as “Opinion”), proposing relevant opinions and specific operations to promote employment work of general college graduates. The Opinion clarifies that if Small and Medium-size enterprises and non-public enterprises accept college graduates and sign labor contract with a term over one year and pay for social insurance premium, the enterprises can get social insurance subsidies according to the actual employed numbers. In addition enterprise can get RMB 900 as pre-job training subsidy and technique appraisal subsidy if the graduates employed by enterprises participate in pre-job training and are accredited qualified. Ailing enterprises which meets the condition can also get post subsidy of no longer than six months according to number of college graduates kept as key technician.
Relevant documents refer to http://www.ciicgz.com/lawinfo.aspx?id=1068

2. 1 Guangdong Provincial Local Taxation Bureau and Guangzhou Municipal Local Taxation Bureau Will be In Full Charge of Collecting Social Insurance Premium
Guangdong Provincial Local Taxation Bureau Affiliated Branch has been in full charge of collecting social insurance premium since August 2009 and relevant work has been carried out on the way.
Guangzhou Municipal Local Taxation Bureau will start to be in full charge of collecting social insurance premium of Guangzhou since October 2009. Since then the collection service will be handled by local tax authorities instead of social insurance center in Guangzhou.
For more information please refer to the notice we sent you recently.

4. 1 The State Tax Administration Released Circular on Several Issues of Verifying and Levying Enterprises Income Tax
In the Circular on Several Issues of Verifying and Levying Enterprises Income Tax released on July 14 2009, the State Tax Administration elaborated enterprise types included in “special tax payers”, stipulating these “special tax payers” should not apply to Measures on Verifying and Levying Enterprise Income Tax since January 1st 2009. This document also requires tax authority in charge to strictly confirm the levying method according to the provided scope and standard, not expanding the scope of assessment collection, levying enterprise income tax through assessment collection from enterprises which could not meet audit-based condition, and urging those enterprises to improve their accounting process and financial management. Audit-based collection shall be implemented to replace assessment collection as soon as they meet the audit-based conditions.
Relevant documents refer to http://www.ciicgz.com/lawinfo.aspx?id=1065

4.2 Circular on Payment Deadline for Undeclared Tax
According to Reply of the State Tax Administration regarding Payment Deadline for Undeclared Tax released by the State Tax Administration on June 15 2009, if tax payers fail to declare tax and cause unpaid tax or paid tax less than the taxable amount, it should not be deemed as tax evasion, tax revolt or tax fraud. According to Article 52 of Tax Collection Management Law, the payment term should be three years generally, five years at maximum for special cases.
Relevant documents refer to http://www.ciicgz.com/lawinfo.aspx?id=1066

4. 3 Circular on Clarifying Several Policy Execution Issues of Individual Income Tax 
The State Tax Administration released Circular on Clarifying Several Policy Execution Issues of Individual Income Tax (herein after referred to as “Circular”) on August 31. The Circular clarified several issues such as tax calculation of Double Wages, tax collection of director income, identification of oversea Chinese and deduction of the additional fees, etc.
a) Tax Calculation of Double Wages. The Circular stipulates that Article 1 of Reply of the State Tax Administration regarding Several Policies of Individual Income Tax was halted to be executed. That means Double Wages gained by individual would not be deemed as one-single-month income to calculate individual income tax but should be combined with wage of the very month to calculate individual income tax.
b) Tax collection of director income. The Circular stipulates that where individual is employed by Company (including affiliate companies) and also take post as director or supervisor, the director income, supervisor income should be combined with individual income and calculated individual income tax.
c) For the people who meet the overseas Chinese identification, the income they gained from work within Chinese territory can be deducted RMB 4800 according to the standard for calculating foreigner’s individual income tax if the materials which could prove tax payers’ overseas Chinese identification.
Relevant documents refer to http://www.ciicgz.com/lawinfo.aspx?id=1070

5. 1 Remind: 2009 National Holiday and Mid-autumn Day Arrangement
According to Circular of General Office of the State Council regarding Certain Festivals and Holidays Arrangement in 2009, holidays for 2009 National Holiday and Mid-autumn Day shall be eight days, from Oct. 1 to Oct. 8, among which Oct. 1, Oct.2 and Oct.3 are statutory holidays for National Holiday; Oct. 4 is public resting day as usual. Public resting day and Mid-autumn Day on Oct 3 should be transferred to Oct. 5 and Oct.6 respectively. Sept.27 (Sunday) and Oct.10 (Saturday) should be on work.
Therefore, if employer arranges employee to work overtime on Oct.1, Oct.2, Oct.3 and Oct.6, employer should pay no less than three times of employee’s normal salary to employees according to law.