26th Session Watch Pt. 1: NPCSC to Review Draft Revisions to Enterprise Income Tax Law and Anti-Unfair Competition Law

The 12^th NPC Standing Committee (NPCSC) will convene its 26^th Session from February 22 to 24, the Council of Chairmen decided today. The following is our customary report on the proposed agenda of the upcoming Session.

As is usual for February sessions, the proposed agenda contains only a handful of—this time three—legislative bills (due to the proximity of NPC plenary sessions in early March). Still, that number is the highest yet for a February session of the 12^th NPCSC, as it enters its last year in office.

1. Draft revision to the Red Cross Society Law.
   The draft revision will be reviewed for the third time, and we expect the NPCSC to approve it after the three-day session. The draft revision, among other things, makes significant changes to the Red Cross society’s internal organizational structure, and adds mechanisms for supervising its use of donations, likely in response to a 2011 scandal that gravely damaged the organization’s reputation.
2. Draft amendment to the Enterprise Income Tax Law.
   The draft amendment was submitted by the State Council. At this point we know very little about its content. Depending on the scope of changes proposed in the amendment, it may undergo up to three deliberations before being passed. The Law was passed in 2007 to merge the previously separate income tax regimes for Chinese domestic and foreign enterprises.
3. Draft revision to the Anti-Unfair Competition Law.
   This draft revision was submitted by the State Council as well, back in November 2016. The task to revise the Anti-Unfair Competition Law is listed in Category II of the 12^th NPCSC’s five-year legislative plan (see sidebar), which indicates intermediate level of difficulty. A previous version of the draft revision, released in February 2016 for public comments, can be found here. [Update (Feb. 27, 2017): Please see this post for English and Chinese versions of this Draft Revision.] We expect the draft revision to be considered at three different sessions before being approved.

In addition to these three bills, the upcoming Session will also consider a draft of the NPCSC’s work report to the 2017 NPC session scheduled to open on March 5, as well as other logistical matters related to this NPC session.