Policy analysis on business tax exemption for offshore service outsourcing income

Posted by on October 12, 2011 under Tax Incentives | Be the First to Comment

According to Caishui Notice No 64, the business tax on offshore service outsourcing income could be exempted. On 23rd Dec, 2010, Beijing issued 2010 NO 6 Notice regarding “Follow-up measures on Beijing local tax bureaus cancelling approval items on business tax exemption on technology transaction (Trial)”, and made explicit regulations on application related items.
According to Notice NO 6, outsourcing enterprises in Beijing who apply business exemption should firstly apply outsourcing contracts confirmation to Beijing Commerce Commission and provide offshore service outsourcing contracts (Chinese version and foreign version) with signature or seal. The specific procedures of contracts confirmation please refer to “offshore service outsourcing contracts confirmation guidance” on Beijing Commerce Commission website.
After contracts confirmation, enterprises should provide application reports, contracts and confirmation form of Beijing Commerce Commission, to tax authorities for record.
After record in tax authorities, enterprises should fill and submit application form and technology income verification form during tax declaration.
If the amount of outsourcing income exceeds the amount in verification form, enterprise should provide written situation statement and supplementary contracts to tax authorities for confirmation, business tax could only be exempted after tax authorities’ confirmation.
Meanwhile, tax authorities should check and verify enterprises’ application, make trace analysis and statistics, report to Beijing business tax authorities monthly and proactively communicate with supervisors once problems.

End to Tax Exemption for Restricted Listed Shares

Posted by on January 28, 2010 under Corporate Tax Planning, Individual Income Tax, Tax Incentives | Be the First to Comment

On 17 January 2010 the State Administration of Taxation issued Guoshuihan [2010] 9 providing clarification on the VAT tax rebate for R&D enterprises.

From 1 July  2009 to 31 December   2010, domestic and foreign-funded R & D institutions or centres will be entitled to a full refund on value-added tax when purchasing Chinese manufactured equipments. Whether a particular transactions falls within the timeframe will depend upon the timing of the VAT invoice.

This is China’s latest round of tax  concessions aimed to encourage and promote scientific and technological development. This is favorable news to foreign-funded R & D institutions or centres. Other tax concessions encouraging technological development include the enterprise income tax concessions for high tech enterprises and the business tax exemption on technology transfers.