Income Tax Law Of The People's Republic Of China Concerning Chinese-Foreign Equity Joint Ventures

Income Tax Law Of The People's Republic Of China Concerning Chinese-Foreign Equity Joint Ventures

September 10, 1980
　
Article 1 Income tax shall be paid in accordance with this Law by Chinese-foreign equity joint ventures (here in after referred to as "joint ventures") within the territory of the People's Republic of China on their income from production, business operations and other sources.
Income tax on the income derived from production, business operations and other sources by branches and sub branches of a joint venture that are within and outside the territory of China shall be paid by their head office on a consolidated basis.
　
Article 2 The taxable income of a joint venture shall be the amount remaining from its gross income in a tax year after the costs, expenses and losses have been deducted.
　
Article 3 The income tax rate on joint ventures shall be 30%. In addition, a local income tax of 10% of the assessed income tax shall be levied.
The income tax rates on joint ventures exploiting petroleum, natural gas and other resources shall be stipulated separately.
　
Article 4 In the case of a foreign joint venture remitting out of China its share of profit obtained from the venture, an income tax of 10% shall be levied on the remitted amount.
　
Article 5 A joint venture scheduled to operate for a period of 10 years or more shall, upon approval the tax authorities of an application filed by the venture, be exempted from income tax in the first two years after it has begun to make a profit and allowed a 50% reduction in the third through the fifth years.
With the approval old the Ministry of Finance of the People's Republic of China, joint ventures engaged in low-profit operations such as farming and for estuary or joint ventures established in remote, economically under-developed areas may be allowed a 15-30% reduction in income tax for a period of another ten years following the expiration of the term for exemption and reductions prescribed in the preceding paragraph.
　
Article 6 A joint venturer which reinvests in China its share of profit obtained from the venture for a period of not less than five years shall, upon approval by the tax authorities of an application filed by the joint venturer, be refunded 40% of the income tax already paid on the reinvested amount.
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