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Notice of the State Taxation Administration on How to Handle the Taxation of Foreign-Funded Enterprises in Which the Proportion of Foreign Investment Is Lower Than 25%
( 2003-04-18 15:36) (chinadaily.com.cn)

(Promulgated on April 18,2003 by the State Administration of Taxation)

The administrations of state taxes and the administrations of local taxes of all provinces, autonomous regions, municipalities directly under the Central Government, and cities under state planning:

In order to facilitate the relevant departments in all places to accurately understand and ensure the implementation of the Notice Concerning the Relevant Issues on Strengthening the Examination, Approval, Registration, Foreign Exchange Control and Taxation Administration of Foreign-Funded Enterprises by the Ministry of Foreign Trade and Economic Cooperation, the State Taxation Administration, the State Administration for Industry and Commerce and the State Administration of Foreign Exchange (No. 575 [2002] Promulgated by the Department of Treaties and Law of the MOFTEC), we hereby clarify the relevant issues on how to handle the taxation of newly established foreign-funded enterprises in which the contribution of foreign investor is lower than 25% (hereinafter referred to as enterprises in which foreign investment is lower than 25%) as follows:

I. On the issue of applicable tax system. Enterprises in which foreign investment is lower than 25% shall all be considered as domestic enterprises in the application of tax rules, and shall not enjoy tax treatments as foreign-funded enterprises, unless it is otherwise specially prescribed by the State Council.

II. On the issue of tax registration. Enterprises in which foreign investment is lower than 25% shall all be considered as domestic enterprises in making tax registration, unless it is otherwise specially prescribed by the State Council.

Please abide by and implement the above provisions.

State Taxation Administration

   
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