Circular on Value-added Tax Policy on Software Products
Circular on Value-added Tax Policy on Software Products
Circular on Value-added Tax Policy on Software Products
Cai Shui [2011] No. 100
October 13, 2011
The finance departments ( bureaus), offices of the State Administration of Taxation, local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government, cities specifically designated in the state plan and the finance bureau of Xinjiang Production and Construction Corps:
In order to implement the relevant spirit of the Circular of the State Council on Printing and Distributing Certain Policies on Further Encouraging the Development of the Software Industry and the Integrated Circuit Industry (Guo Fa [2011] No.4), further promote the development of the software industry and facilitate the information technology development of China, value-added tax policy on software products is hereby notified as follows:
I.Value-added tax (VAT) policy on software products
1. If general VAT taxpayers sell software products developed and produced by them, VAT shall be collected at a tax rate of 17% and the refund-upon-collection policy shall be applied to the part VAT in excess of 3% of their actual tax burden.
2. If general VAT taxpayers sell software products which are imported and localized, the sold software products may enjoy the refund-upon-collection policy for VAT specified in Item 1 of this Article.
Localization refers to any activity in which the imported software products are newly designed, improved or transformed, excluding the Chinese treatment of the imported software products.
3. If taxpayers are entrusted to develop software products, VAT shall be collected in the case that the copyright of the software products is owned by the entrusted party; No VAT shall be collected in the case that the copyright of the software products is owned by the entrusting party or jointly owned by the two parties; for software products which haven been registered with the State Copyright Administration and the copyright and ownership of which are transferred when taxpayers sell them, no VAT shall be collected.
II.Definition and classification of software products and
The term "software products" as mentioned herein refers to information processing programs and relevant documents and data.
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