In the news: Antitrust investigations not targeting foreign companies, China signs tax convention and Consumer Rights Law

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China signs multilateral tax convention

On Tuesday, China signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The Convention is part of a global effort to combat tax avoidance and evasion by cooperating with other states in the assessment and collection of taxes. Wang Jun of the State Administration of Taxation (SAT) signed the Convention in Paris. The Convention was developed by the Organisation for Economic Co-operation and Development (OECD) and the Council of Europe in 1988. It was updated in 2010 to bring it into line with international standards on the exchange of information for tax purposes and to allow any country to become a Party to the Convention.

Source: China Law Info

More analysis: iExpats

This is the first multilateral tax agreement to be signed by China. Wang Jun noted that the significance of signing the Convention comes when China has begun economic transition and marks a new step for China to open-up and reform tax matters. Its impact will be felt among foreigners living, and foreign companies doing business, in China. It is a common occurrence that some foreign individuals and companies do not disclose all their taxable income in China. There has also been speculation that this may lead to China signing-up to the Foreign Account Compliance Tax Act (FATCA). This would see China sharing information of financial institutions with US clients about any transactions on accounts with $50,000 at the end of the tax year or a balance that has exceeded $75,000 during the tax year. This may be the next logical step, but it does not mean China will go that far.

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Consumer Rights Law reviewed

China Daily reported that lawmakers on Tuesday held group reviews of draft amendments to the PRC Law on the Protection of the Rights and Interests of Consumers (中华人民共和国消费者权益保护法). The Law first came into effect 20 years ago and was tabled for a second reading at this week's bimonthly session of the National People's Congress Standing Committee in Beijing. Lawmakers will specify items that will be part of the seven-day unconditional return policy in the Law for refunds.

Source: China Daily

The Consumer Rights Law is hugely outdated and much has changed in consumer habits since it came into effect, especially with the rise of online shopping. There has been discussion from legislators that the Law needs to be improved to prevent consumers from abusing their rights. The Draft also calls for greater support to consumer associations to protect consumer rights, including funding to associations. This is in response to deceptive advertising and production of fake goods. It seems the Draft is quite balanced in its approach, as it ensures consumers are better protected and also consider sellers by restriction consumer abuse.

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