Circular of the State Council on Issues concerning Adjusting the Tax Policies for Financial and Insurance Industries

Circular of the State Council on Issues concerning Adjusting the Tax Policies for Financial and Insurance Industries


Circular of the State Council on Issues concerning Adjusting the Tax Policies for Financial and Insurance Industries

Guo Fa [1997] No.5

February 19, 1997

The people's governments of all provinces, autonomous regions, municipalities directly under the Central Government, all ministries, commissions and directly subordinate institutions of the state council:

For the purpose encouraging the role of taxation in regulation and control, and further smoothing the relations of distribution between the State and the financial and insurance enterprises, promoting equal competition among financial and insurance enterprises and guaranteeing the financial revenue of the State, the State Council has decided to adjust the taxation policy for the financial and insurance industries as of January 1, 1997. The related questions are hereby clarified as follows:

I. Standardize the income tax rate of the financial and insurance enterprises. The income tax rate of 55% currently in force for the financial and insurance enterprises shall be reduced to 33%. Budget levels for the income tax of the financial and insurance enterprises shall remain unchanged.

II. Revise the provisions on sales tax rate for the financial and insurance industries in the Interim Regulations of the People's Republic of China on Business Tax, raising the current sales tax rate of 5% for the financial and insurance industries to 8%.
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