CHINA Law and Practice Contributed by: Liu Cheng and Li Yumeng (Audrey), King & Wood Mallesons
2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds The turnover of a single undertaking that has participated in a concentration transaction shall be the sum of the turnovers of the following undertakings: (i) the above-mentioned single undertaking; (ii) other undertakings that the sin - gle undertaking controls, directly or indirectly; (iii) other undertakings that directly or indirectly control the undertaking mentioned in (i); (iv) other undertakings controlled, directly or indirectly, by the undertaking mentioned in (iii); and (v) other undertakings jointly controlled by two or more undertakings indicated in (i) to (iv). The turnover of a single undertaking that has participated in a concentration transaction shall not include the turnover generated among undertakings indicated in (i) to (v) above. The seller shall only include the portion of the turnover that relates to the target. In the case of asset acquisition, if the seller no longer has con - trolling power over the asset sold, only the turno - ver generated by such asset shall be calculated; and in the case of equity acquisition, if the seller no longer has controlling power over the target company after the transaction, only the turnover of the target company shall be calculated. The group-wide turnover shall be the sum of the turnovers of the undertakings indicated in (i) to (v) above. If the undertakings have acquired any business during the reference period, the turnover of the newly acquired business shall be calculated. If the undertakings have disposed of any busi - ness during such period, the turnover of the disposed-of business shall be excluded.
exchange rates released by the China Foreign Exchange Trade System in 2024, ie, USD/ CNY is 1:7.1217), and the nationwide turno - ver within China of each of at least two of the undertakings concerned in the preceding financial year was more than CNY800 million (approximately USD112.33 million); or • the combined nationwide turnover within China of all the undertakings concerned in the preceding financial year was more than CNY4 billion (approximately USD561.66 million), and the nationwide turnover within China of each of at least two of the undertakings concerned in the preceding financial year was more than CNY800 million (approximately USD112.33 million). At present, there are no special jurisdictional thresholds applicable to particular sectors. 2.6 Calculations of Jurisdictional Thresholds The jurisdictional thresholds are calculated based on turnover. The turnover includes the income that the relevant undertaking has earned from the sale of products and the provision of services in its preceding financial year, less the relevant taxes and the related fiscal contribu - tions. If the sales or assets are recorded in a foreign currency, the average central parity of exchange rates released by the China Foreign Exchange Trade System in the corresponding financial or
calendar year is usually adopted. The thresholds are not asset-based.
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