The Council of Chairmen met on August 17 and decided that the 13th NPC Standing Committee (NPCSC) will meet for its fifth session from August 27 to 31. The session will consider at least seven legislative bills, including the much-anticipated draft Separate Parts of China’s first Civil Code, draft E-Commerce Law, and three tax bills. As usual, below we take a look at the legislative bills on the session’s agenda.
To start, the draft E-Commerce Law (电子商务法) returns for a fourth—and most certainly final—round of deliberation. It was last reviewed just two months ago at the 13th NPCSC’s third session. Its passage was delayed in part due to several newly added provisions about which NPCSC members harbored doubts; it now appears that a consensus has been built. The draft Soil Pollution Prevention and Control Law (土壤污染防治法) returns for a third—also most likely final—reading. It was last reviewed in December 2017.
Draft amendments to both the Individual Income Tax Law (个人所得税法) and the Criminal Procedure Law (刑事诉讼法) return for a second—and again, most likely final—round of deliberation. The former was first submitted just two months ago and did not fare particularly well in the NPCSC. We then predicted that its second reading would not happen till October. But its earlier-than-expected return signals that either most disagreement has been resolved (possible but unlikely) or that authorities are trying push it through so that it could be implemented starting next year. We also summarized its main content here.
The draft Criminal Procedure Law amendment was first presented to the NPCSC in April. As we have summarized here, it includes three types of provisions: (1) those relating to expedited procedures and “plea-bargaining” reform; (2) those prescribing procedures for trials in absentia; (3) and those making conforming amendments based on newer laws. The amendment is translated in full on China Law Translate, which has also posted a comparison chart we made. Amnesty International in June criticized the draft amendment for “violat[ing] the right to a fair trial by depriving defendants of minimum guarantees, including to be tried in their presence and in public hearings, and by infringing upon the independence and impartiality of courts.” We will report on any new provisions in the final draft.
Next, the Council of Chairmen submitted for deliberation draft Separate Parts of the Civil Code (民法典各分编). (The General Part (总则编) was enacted in 2017, titled General Provisions of the Civil Law (民法总则) before the Code is adopted.) A recent version of the draft Civil Code (that was sent to educational institutions for comments in May) included six separate parts, governing property rights, contracts, personality rights, marriage and family, inheritance, and tort liability, respectively. The NPC has previously emphasized that “the compilation of a Civil Code is not the formulation of brand-new civil statutes”—we thus do not anticipate a complete overhaul of existing civil laws. But the NPC also stated that the Code would “modify and improve [civil law] provisions that are not adapted to current situations”—especially those in older laws like the Marriage Law (last amended in 2001) and the Contracts Law (enacted in 1999). The NPC plans to adopt the Civil Code in 2020.
Lastly, the State Council submitted two draft tax laws for deliberation: Vehicle Acquisition Tax Law (车辆购置税法) and Farmland Occupancy Tax Law (耕地占用税法). Both are part of the NPCSC’s plan to implement the “principle of law-based taxation” (税收法定原则) that we have explained in detail here.
A draft Vehicle Acquisition Tax Law was jointly released by two State Council departments for public comments roughly a year ago. The draft does not differ much from the interim regulations that now govern the tax. The tax will continue to be imposed on individuals or entities that “acquire”—defined to include “purchase,” “import,” and “self-manufacture”—taxable vehicles: cars, motorcycles, trailers (挂车), and trolley cars (有轨电车) (arts. 2–3). And the tax rate remains at 10%. But under the draft, tax authorities no longer have the power to set a “minimum taxable value” (最低计税价格) for each class of taxable vehicles. They nevertheless are authorized to independently determine the amount of tax payable if “the taxable value of a taxable vehicle as declared by the taxpayer is inconsistent with the actual taxable value” (art. 7).
A draft Farmland Occupancy Tax Law was also released for public comments last year. The draft does not substantially differ from the regulations now governing the tax, either. Under the draft, the tax is assessed based on the area of farmland that an individual or entity occupies to construct buildings or structures or to “engage in non-agricultural construction” (arts. 2–3). The applicable tax rates vary across counties; they are to be set by provincial legislatures (subject to other restrictions) within a certain range that is tied to the per capita area of farmland within each county (see art. 5). The draft does, however, depart from the current regulations in authorizing increased tax rates for “high-quality farmland that is not basic farmland” (art. 7, para. 2); “basic farmland” (基本农田) is already subject to increased rates. The draft also expands the types of tax-exempt entities to include all “medical institutions” (not just hospitals) and all “social welfare organizations” (not just nursing homes) (art. 8, item 1).
We expect both tax laws to pass after at least two rounds of deliberation—possibly within the year.
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The press release of the Council of Chairmen’s meeting suggests (with the character “等”) that there might be additional bills on the finalized agenda. We will update this post after the session convenes in ten days.
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