Q&A

1. For small-scale taxpayers for VAT

The implementation period of the above policies is from January 1, 2019 to December 31, 2021.

Taxpayers can choose the tax payment period, that is, apply for changing quarterly tax declaration to monthly tax declaration or monthly tax declaration to quarterly tax declaration.

2.For small meager-profit enterprises

The implementation period of the above policies is from January 1, 2019 to December 31, 2021.

3. For general taxpayers

(1) Reducing VAT rate

Since April 1, 2019, where the general taxpayers of VAT incur VAT taxable transactions of selling or importing goods and the original applicable tax rate is 16%, the tax rate will be adjusted to 13%; where the original applicable tax rate is 10%, the tax rate will be adjusted to 9%; where the original applicable tax rate is 6%, the tax rate shall remain unchanged. The updated tax rates are shown in the table below:

• If a VAT invoice has been issued by a taxpayer before April 1 at a tax rate of 16% or 10%, and a red-letter invoice is required in case of sales discount, suspension or refund after April 1, it shall be issued at the original applicable tax rate. If the invoice is incorrect and needs to be reissued, the red invoice shall be issued first at the original applicable tax rate, and then the correct blue invoice shall be re-issued.

• Taxpayers who fail to issue VAT invoices for VAT taxable sales behavior before April 1 shall also make up VAT invoices at the original applicable tax rates if they need to make up VAT invoices.

(2) Expanding input tax credits

1) Incorporating passenger transport services into deductions

From April 1, the input tax on purchasing passenger transport services will be allowed to be deducted from the substituted money on VAT.

It should be noted that when taxpayers purchase passenger transportation services and obtain special VAT invoices or electronic ordinary VAT invoices, the amount of tax indicated on the invoice is deducted. Moreover, for other credentials that can be used for deduction are limited to itinerary of e-ticket for air transport, railway tickets, road or waterway tickets with passenger identity information, the deductible input tax shall be calculated according to the relevant denomination and tax rate of the tax-bearing ticket.

The specific formula for calculating the input tax is as follows:

Input tax of air transport= (air fare + fuel surcharge) /(1+9%)*9%

Input tax of railway passenger transport= face amount/(1+9%)*9%

Input tax of highway, waterway and other passenger transport= face amount/(1+3%)*3%

It is suggested that enterprises should sort out this kind of invoices separately from other reimbursement invoices for input tax statistics.

2) Cancellation of installment deduction of real estate input tax

From April 1, 2019, the real estate input tax can be deducted in full at one time.

3) 10% input tax extra deduction policy

From April 1, 2019 to December 31, 2021, taxpayers of production and living service industries are allowed to add 10% of input tax that can be deducted in the current period to offset the tax payable of VAT. (that is called to “extra deduction policy”) “Taxpayers of production and living service industries” who are subject to the extra deduction policy refer to taxpayers whose sales obtained from postal services, telecommunications services, modern services and living services account for more than 50% of the total sales.

It should be noted that the extra deduction policy is not applicable to taxpayers exporting labor and goods and their occurrence of cross-border taxable behavior, and the corresponding input tax cannot be calculated for the extra deductible amount. Where taxpayers are unable to divide the input tax which cannot be calculated for the extra deductible amount, the following formula will be used to calculate the input tax of extra deductible amount:

Total input tax that cannot be divided in the current period * Sales of current export goods or services and cross-border taxable activities/total sales for the current period

Based on the info we got now, the representative office of a foreign enterprise in Shanghai is an general taxpayer, the 10% input tax extra deduction policy will also be applicable to them. If there is any change we will inform at once.

Taxpayers who are applicable to extra deduction policy should submit the Declaration on the Applicable Extra Deduction Policy through the Internet office when they confirm the applicable extra deduction policy for the first time in the year, otherwise the extra deduction cannot be realized. It should be noted that whether it will continue to apply in the following years shall be determined based on the previous year’s sales volume. That is to say, whether it will continue to apply in 2020 and 2021 should be determined according to its annual sales in 2019 and 2020 respectively. If meeting the requirements, it is necessary to submit the Declaration on the Applicable Extra Deduction Policy again.

(3) The trial implementation of tax retention and refund system at the end of the period

From April 1st, 2019, the tax retention and refund system at the end of the VAT period will be implemented tribally, and the taxable amount of taxpayers who meet the conditions after the implementation of the policy will be refunded according to relevant regulations.

Tax refunds are available for the following conditions:

• The incremental tax amount is greater than zero for six consecutive months (tax paid quarterly for two consecutive quarters) from the period of the tax payment in April 2019, and the incremental tax credit is not less than 500,000 yuan in the sixth month; "Incremental tax credit" refers to the newly added end-of-term tax amount for retention and refund compared with that at the end of March 2019;

• The tax credit rating is Grade A or Grade B;

• Not punished by the tax authorities twice and more for tax evasion within 36 months before applying for tax refund;

• Have no the case of fraudulent tax retention and refund, export tax rebate or false value-added tax invoice filling within 36 months before applying for tax refund;

• Have not enjoyed the policy of refund upon levied or refund after levied from April , 2019. (For example, the company of diamond exchange is not eligible for enjoying the tax refund system as it has enjoying the refund upon levied policy)

(4) Adjustment of export tax rebate rate and other rates

From April 1st, 2019, the export tax rebate rate was adjusted to 13% for the export goods with the original 16% tax rate and 16% export tax rebate rate; that to 9% for the export goods with the original 10% tax rate and 10% export tax rebate rate.

For the export transactions before June 30, 2019, a transitional arrangement is given as follows:

• The company that adopts the VAT exemption and refund method (such as foreign trade enterprises), if the value-added tax has been levied at the rate of 16% or 10% at the time of purchase, will follow the export tax rebate rate before the adjustment; the company whose value-added tax has been levied at the rate of 13% or 9% at the time of purchase, will follow the export tax rebate rate of 13% or 9%;

• The company that adopts the VAT exemption and refund method (such as production enterprises), will follow the export tax rebate rate before the adjustment (i.e. 16% or 10%); when calculating the tax exemption and refund, if the applicable tax rate is lower than the export tax rebate rate, the difference between the applicable tax rate and the export tax rebate rate is regarded as zero for calculation of tax exemption and refund.

(5) Education fee surcharge reduction policy

General taxpayers with monthly sales less than or equal to 100,000 are exempt from education surcharges and local education surcharges.

(6) General taxpayers can be transferred to small-scale taxpayers

A general taxpayer who has accumulated sales of less than 5 million yuan for 12 consecutive months (one month for one tax period) or four consecutive quarters (one quarter for one tax period) before transfer, can selectively enter the registration for becoming a small-scale taxpayer before December 31,2019.

It should note specially that the taxpayer who chooses the registration of mode transform in 2019 must not be transferred into a small-scale taxpayer after it is registered as a general taxpayer once again.

（1）As a major branch of accounting, management accounting is also a component of accounting information system as management accounting. The object of management accounting is cash flow, therefore it shall focus on the information about cash flow instead of the cash flow itself and the basic content of management accounting shall be to provide planning and decision-making relevant information, control performance evaluation information. Financial management shall focus on the cash flow itself instead of the information about cash flow, and its basic content shall be to financing arrangement, investment arrangement and profit distribution arrangement, etc.

（2）Management accounting focuses on providing information for management decision in order to maximize profit; cost accounting focuses on providing information for management control in order to minimize profit. Management accounting is based on the cost behavior analysis, disclosing relations between different costs and revenues. Therefore, the essential of the decision making and control in management accounting is the relation between cost and revenue, not the cost alone. In the whole management accounting decisions, marginal income equaling to marginal cost is the basis to form different decision-making styles, while the pursuance of the difference between total income and total cost, namely the maximum profit, is the target that various decision makings and controls strive to achieve.

I. Regarding resident taxpayers and non-resident taxpayers

Related clauses of the Individual Income Tax Law of the People's Republic of China

An individual who has a domicile in China or has no domicile but has lived in China for at least a total of 183 days in a tax year is a resident. Residents with income earned inside and outside China shall pay individual income tax in accordance with the provisions herein.

An individual who has no domicile in China and also does not live in China, or has no domicile and has lived in China for less than 183 days in a tax year is a non-resident. Non-residents with income earned inside China shall pay individual income tax in accordance with the provisions herein.

Related clauses of the implementing regulations of the Individual Income Tax Law of the People's Republic of China According to the Individual Income Tax Law, a domicile in China refers to the habitual residence in China due to the household registration, family and economic interests. The income earned inside and outside China refers to the income derived from China and income derived from outside China respectively.

After bringing its filings to chief tax authority, individuals who do not have a domicile in China and have lived in China for a total of 183 days every year with its continuous years less than six shall be exempted from paying individual income tax for the income from China and paid by the overseas company or individual; if a single overseas trip over 30 days is happened in any year when the individual has lived in China for at least 183 days, continuous years with a year of living in China for at least 183 days shall begin to run anew.

Individuals who do not have a domicile in China and have lived in China less than 90 days in a tax year shall be exempted from paying individual income tax for the income from China and paid by the foreign employer, not including the part paid by its institutions or sites in China.

Analysis :

1. Take 183 days as the time node for distinguishing resident taxpayers from non-resident taxpayers.

2. If foreigners reside in China:

Time of residence is no more than 90 days: the individual with income earned inside China shall pay individual income tax when it is paid inside China.

Time of residence is more than 90 days and less than 183 days: the individual with income earned inside China shall pay individual income tax whenever it is paid inside China or outside China.

Time of residence is more than or equal to 183 days and less than 6 years: after bringing its filings to chief tax authority, the individual shall be exempted from paying individual income tax for the income earned only outside China and paid overseas.

Time of residence is no less than 6 years: all income is subject to individual income tax.

Note: if a single overseas trip over 30 days is happened in any year when the individual has lived in China for at least 183 days, continuous years with a year of living in China for at least 183 days shall begin to run anew. It is recommended that qualified foreigners can leave China for 30 days in 2019 (one-time stay outside China for more than 30 days, excluding the entry and exit date) to avoid being traced back to the past time of residence in China.

II. Regarding the identification numbers of taxpayers

Related clauses of the Individual Income Tax Law of the People's Republic of China

If the taxpayer owns his ID number of Chinese citizenship, it is the taxpayer identification number; if the taxpayer does not have a Chinese citizenship number, the tax authority shall assign a taxpayer identification number to the taxpayer without an ID number of Chinese citizenship. When the withholding agent withholds the tax, the taxpayer shall provide the withholding agent with the taxpayer identification number.

Analysis :

Foreign individuals are required to submit valid identification information to the tax authority to obtain a unique taxpayer identification number and use this identification code as the only code to pay the individual income tax in China.

III. Analysis of new withholding procedures

1. When the withholding agent pays the wages and salaries to the resident, the withholding tax shall be calculated according to the cumulative withholding method and the withholding declaration for all the taxpayers and in full amount shall be filed on a monthly basis.

(Applicable for withholding and prepayment of individual wages and salaries)

For example:

Wang’s salary is 30,000 yuan in January. In absence of any special additional deductions, tax of withholding and prepayment is as follows:

(30000-5000)×3%=750

Wang’s salary is 50,000 yuan in February. In absence of any special additional deductions, tax of withholding and prepayment is as follows:

[(30000+50000)-(5000+5000)]×10%-2520-750=3730

Wang’s salary is 80,000 yuan in March. In absence of any special additional deductions, tax of withholding and prepayment is as follows:

[(30000+50000+80000)-(5000+5000+5000)]×20%-16920-750-3730=7600

And so forth

Among them: the cumulative deduction for expenses is calculated by 5,000 yuan per month multiplied by the number of months of employment of the taxpayer as of this month in the current year. That is to say, if the taxpayer enters the post in May, when the withholding agent pays the withholding tax of the salaries in May, the deduction for expenses is calculated at 5,000 yuan. When the withholding agent pays the withholding tax of the salaries in June, the deduction for expenses is calculated at 10,000 yuan. And so forth.

The above applies to the taxpayer's job replacement.

2. The withholding agent pays income from labor services, contribution fees, royalties to the resident and withholds and prepays individual income tax on a time or monthly basis.

Earnings from labor services, contribution fees and royalties subtracting the expenses is the amount of income. Among them, the amount of earnings from contribution fees is calculated at 70%.

Deduction for expenses: If the earnings from labor services, contribution fees and royalties is no more than 4,000 yuan each time, the deduction for expenses shall be calculated at 800 yuan. For each earning of more than 4,000 yuan, the deduction for expenses shall be calculated at 20%.

(Applicable for withholding and prepayment of earnings from labor services)

For example:

In January, Wang obtained 1,000 yuan of income from labor services paid by Company A, 1,200 yuan of contribution fees paid by Company B and 1,500 yuan of royalties paid by Company C. The withholding tax is as follows:

Company A: (1000-800) ×20%=40

Company B: (1200-800) ×70%×20%=56

Company C: (1500-800) ×20%=140

In February, Wang obtained 8,000 yuan of income from labor services paid by Company A, 20,000 yuan of contribution fees paid by Company B and 80,000 yuan of royalties paid by Company C. The withholding tax is as follows:

Company A: (8000-8000×20%) ×20%=1280

Company B: (20000-20000×20%) ×70%×20%=2240

Company C: (80000-80000*20%) ×20%=12800

In March, Wang obtained 40,000 yuan of income from labor services paid by Company A. The withholding tax is as follows:

Company A: (40000-40000×20%)×30%-2000=7600

3. Withholding method for non-resident

Non-resident’s wages and salaries subtracting 5,000 yuan is the taxable income. The earnings from labor services, contribution fees and royalties each time are taxable income. Among them, earnings from labor services, contribution fees and royalties subtracting 20% of the expenses is the amount of income. The amount of earnings from contribution fees is calculated at 70%.

(Applicable for individual wages and salaries and earnings from labor services, contribution fees and royalties of non-resident)

Jack’s salary is 30,000 yuan paid by Company A in May. In absence of any special additional deductions, the withholding tax is as follows:

(30000-5000)×20%-1410=3590

Mary’s income from labor services is 30,000 yuan paid by Company B in July. In absence of any special additional deductions, the withholding tax is as follows:

(30000-30000×20%)×20%-1410=3390

Peter’s contribution fees are 30,000 yuan paid by Company C in September. In absence of any special additional deductions, the tax withholding is as follows:

(30000-30000×20%)×70%×20%-1410=1950

4. Withholding method for business income

The total amount of business income in a tax year subtracting costs, expenses and losses is the taxable income.

(Applicable to business income)

The total amount of business income in a tax year subtracting costs, expenses and losses is the taxable income. The taxpayer obtains the business income and the individual income tax shall be calculated on an annual basis. The taxpayer shall, within 15 days after the end of the month or quarter, file a prepaid tax declaration to the chief tax authority at the place where the business is located, and go through settlement for income tax in the chief tax authority at the place where the business is located before March 31 of the following year.

Individuals who have obtained business income without comprehensive income shall subtract 60,000 yuan of the expenses, special deductions special additional deductions and other deductions according to law when the taxable income of each tax year is calculated. The special additional deduction is subtracted when settlement for income tax is gone through.

IV. Analysis of special additional deduction

1. Children's Education

Related expenditure for taxpayers’ children who receive full-time academic education and who are in the pre-school education period from the age of 3 to the age of before enrollment in primary school are deducted according to the quantity standard of 1,000 yuan per child per month. Academic education includes compulsory education (primary and junior high school education), high school education (ordinary high school, secondary vocational, technical education), higher education (junior college, undergraduate, postgraduate and doctoral education).

Parents may choose to deduct 100% from one of them according to the deduction standard, or they may choose to deduct 50% from the two parties respectively according to the deduction standard. The specific deduction method cannot be changed within one tax year. Requirements for retaining information: if the taxpayer's children are educated outside China, the taxpayer shall retain the overseas school admission notice, study visa and other relevant education supporting information for future reference.

2. Continuing education

Expenditures for taxpayers who receive academic (degrees) continuing education in China are deducted according to the quantity standard of 400 yuan per month during their academic (degree) education. The deduction period for the same degree continuing education cannot exceed 48 months. Expenditures for taxpayers who receive continuing education for skilled professional qualifications and for professional and technical personnel qualifications are deducted according to the quantity standard of 3,600 yuan in the year of obtaining the relevant certificate.

Individuals who receive continuing education of bachelor degree or below and are eligible for deductions can choose to deduct from their parents or them.

Requirements for retaining information: taxpayers who receive continuing education for skilled professional qualifications and for professional and technical personnel qualifications shall retain relevant certificate and other information for future reference.

3. Severe diseases medical expenses

Within a tax year, the part exceeding 15,000 yuan of the taxpayer’s medical expenses related to basic medical insurance after deducting medical insurance reimbursement (referring to the self-pay part covered by the medical insurance) is deducted within the limit of 80,000 yuan when settlement for income tax is gone through.

The medical expenses incurred by the taxpayer may be deducted from him or his spouse; the medical expenses incurred by the minor children may be deducted from his father or his mother.

Requirements for retaining information: the taxpayer shall retain the original (or copies) of relevant charge bills for medical services and medical insurance reimbursement and other information for future reference. The health-care department shall provide the patient with the inquiry service of annual medical fee information recorded in the health-care information system.

4. Housing loan interest

If the taxpayer or his spouse individually or commonly uses the commercial bank or the provident fund housing loans to purchase houses within China for himself or his spouse, the mortgage interest expenditures of the first house are deducted according to the quantity standard of 1,000 yuan per month in the year of actually paying mortgage interest with the maximum period of deduction no more than 240 months. The taxpayers can only enjoy the interest deduction of the loan of the first house.

The loan of the first house refers to the housing loan enjoying the loaning rate of the first house.

After the agreement between the husband and wife, they may choose to deduct from one of them. The specific deduction method cannot be changed within one tax year.

For the loan of the first house incurred by purchase of house by the husband and wife respectively before marriage, the husband and wife may choose one of the purchased houses to deduct loan interest expenditure according to 100% of the deduction standard, or they may choose to deduct loan interest expenditure from the two parties respectively for their purchased houses according to 50% of the deduction standard. The specific deduction method cannot be changed within one tax year.

Requirements for retaining information: the taxpayer shall retain the housing loan contract and certificates of expenditures of loan repayment for future reference.

5. Housing rent

The housing rental expenses incurred by taxpayers who do not have their own houses in the main working city can be deducted according to the following quantity standard:

(1) For the municipalities, capital cities, cities specifically designated in the state plan and other cities determined by the State Council, the deduction standard is 1,500 yuan per month;

(2) Except for the cities listed in the first item, cities with a registered population of more than 1 million in the municipal district shall be deducted according to the standard of 1,100 yuan per month; for cities with a registered population of no more than 1 million in the municipal district, the deduction standard shall be 800 yuan per month.

The taxpayer's spouse has its own house in the taxpayer's main working city, and the taxpayer is deemed to have his own house in the main working city.

The registered population of the municipal district shall be subject to the data published by the National Bureau of Statistics.

If the main working cities of both the husband and wife are the same, only one of them can deduct the housing rental expenses.

Housing rental expenses are deducted from the lessee who has signed the housing rental contract.

Taxpayers and their spouses cannot enjoy the special additional deduction of housing loan interest and housing rental expenses at the same time in a tax year.

Requirements for retaining information: the taxpayer shall retain the housing loan contract, agreement and other relevant information for future reference.

6. Support towards the elderly

The taxpayer's supporting expenditure for one or more dependents shall be deducted in accordance with the following quantity

standard: (1) If the taxpayer is the only child, it shall be deducted according to the quantity standard of 2,000 yuan per month; (2) if the taxpayer is not the only child, it is divided by the taxpayer and brothers and sisters of the taxpayer with a monthly deduction quota of 2,000 yuan, and the amount of each person's quota cannot exceed 1,000 yuan per month. It can be shared equally by the supporters or shared according to the agreement, or it can be shared as designated by the dependents. A written sharing contract shall be signed for the agreement or designation, and the designation shall take precedence over the agreement. The specific sharing method and quota cannot be changed within one tax year.

A dependent refers to a parent aged 60 or above and a grandparent aged 60 or above whose children have passed away.

No requirements for retaining information.

Several noticeable points:

1. Taxpayers who enjoy children's education, continuing education, mortgage interest or special additional deductions of housing rent or support towards the elderly may choose to submit the information to the withholding agent for deduction, or may choose to deduct when settlement for income tax is gone through in local chief tax authority from March 1 to June 30 of the following year.

Taxpayers who enjoy special additional deductions of severe diseases medical insurance voluntarily choose to deduct when settlement for income tax is gone through in local chief tax authority from March 1 to June 30 of the following year.

2. The taxpayer can submit individual special additional deduction information to the withholding agent or the chief tax authority through the remote tax terminal (download APP of individual income tax), electronic or paper report (the tax bureau has a special version for download). If the electronic or paper report method is selected to submit the information to the withholding agent, it shall be signed and sealed by both the taxpayer and the withholding agent for confirmation.

3. The relevant information that the taxpayer needs to keep for future reference should be retained for five years. The withholding agent only needs to keep the deduction information form with five years of the retention period, but there is no need to keep relevant information, and there is no need to check the retained information.

4. The withholding agent shall not refuse to file the withholding declaration according to the information submitted by the taxpayer, but there is no obligation for withholding agent to verify the authenticity of the information submitted by the taxpayer, and the taxpayer is responsible for the authenticity of the information.

V. Regarding settlement for income tax

In any of the following circumstances, the taxpayer shall file tax declaration in accordance with the law:

(1) Acquisition of comprehensive income needs to go through settlement for income tax.

(2) Acquisition of taxable income without a withholding agent;

(3) Acquisition of taxable income, and no withholding of tax for the withholding agent;

(4) Acquisition of overseas income;

(5) Cancellation of Chinese household registration due to emigration;

(6) Non-resident individuals obtain wages and salaries from more than two places in China;

(7) Other circumstances as stipulated by the State Council.

The circumstances in which the comprehensive income needs to go through settlement for income tax include:

(1) Obtain comprehensive income from more than two places, and the balance of the annual comprehensive income subtracting the special deduction exceeds 60,000 yuan;

(2) Obtain one or more of incomes from labor services, contribution fees and royalties and the balance of the annual comprehensive income subtracting the special deduction exceeds 60,000 yuan;

(3) The amount of the prepaid tax in the tax year is lower than the taxable amount;

(4) The taxpayer applies for the tax refund.

The taxpayers who need to go through settlement for income tax shall file tax declaration to the chief tax authority at the place where they are employed within the period from March 1 to June 30 of the following year. If a taxpayer has more than two positions and employers, he shall choose to file tax declaration to the local chief tax authority of one of the places where the taxpayer is employed; if a taxpayer does not have a position or an employer, he shall choose to file tax declaration to the local chief tax authority where his residence is registered or in his habitual residence.

The specific measures for taxpayers to go through settlement for comprehensive income will be separately published.

VI. Regarding coordination of relevant preferential policy after the revision of the Individual Income Tax Law

1. Transition policy on year-end bonus

If the resident obtains a one-time annual bonus and it is in compliance with the Notice of the State Administration of Taxation on Adjusting the Calculating Method for Individual Income Tax of Individual's One-Time Annual Bonus (Guo Shui Fa [2005] No. 9), the one-time annual bonus is not deemed as the comprehensive income before the December 31, 2021 and the original calculation method still applies.

If the resident obtains a one-time annual bonus, he can choose to incorporate it into the comprehensive income of the year to calculate the tax.

Since January 1, 2022, if the resident obtains a one-time annual bonus, it shall be incorporated into the comprehensive income of the year to calculate the tax.

2. Regarding severance package

The individual terminates the labor relationship with the employer and obtains one-time compensation income (including the economic compensation, living allowance and other subsidy paid by the employer), and the portion that not exceeds 3 times the amount of the local average salary of the previous year is exempted from individual income tax; the portion that exceeds 3 times the amount is not included in the comprehensive income of the current year, and it applies to comprehensive income tax rate table separately to calculate the tax payment.

3. Regarding special deductions for foreign individuals

During the period from January 1, 2019 to December 31, 2021, if the foreign individual meets the conditions of the resident, he or she may choose to enjoy the special additional deduction of individual income tax, or may choose to follow the stipulations of Ministry of Finance: Notice of the State Administration of Taxation on Individual Income Tax Policies(Cai Shui [1994] No. 20), Notice of the State Administration of Taxation on the Implementation of Individual Income Tax Exemption on Foreign Individuals' Obtaining of the Relevant Subsidies (Guo Shui Fa [1997] No. 54) and Ministry of Finance: Notice of the State Administration of Taxation of Individual Income Tax Exemption on Foreign Individuals' Obtaining of the Subsidies for Houses in Hong Kong and Macao regions (Cai Shui [2004] No. 29) to enjoy subsidy for houses, language training fees, and children's education fees, which can not be enjoyed at the same time. Once a foreign individual makes choice, it cannot be changed during a tax year.

Since January 1, 2022, foreign individuals will no longer enjoy tax exemption preferential policies of housing subsidies, language training fees, and children's education subsidies and shall enjoy special additional deductions as required.

The audit report should be published on the 30th of April of each year。

A labor contract shall contain the clauses as follows：

（1）The employer’s name, residence and legal representative or major principal;

（2）The worker’s name, residence and number of identity card or any other valid identity certificate;

（3）The time limit for the labor contract；

（4）The work contents and place;

（5） The work time, rest and vocation;

（6）The remunerations;

（7）The social security;

（8）The labor protection, work conditions and protection against and prevention of occupational harm;

（9）Other matters that shall be incorporated in the labor contract according to any law or regulation.

Rep. Office and WOFE are different entity and approved by different authorities. We can close down the Rep. Office and open up the WOFE at the same time, with out confliction.