Announcement of the State Administration of Taxation on Issues Concerning the Special Tax Treatment Applicable to Equity Transfer by Non-resident Enterprises
Announcement of the State Administration of Taxation on Issues Concerning the Special Tax Treatment Applicable to Equity Transfer by Non-resident Enterprises
Announcement of the State Administration of Taxation on Issues Concerning the Special Tax Treatment Applicable to Equity Transfer by Non-resident Enterprises
Announcement of the State Administration of Taxation [2013] No. 72
December 12, 2013
In order to regulate and strengthen the administration of the special tax treatment applicable to equity transfer by non-resident enterprises, the relevant issues are hereby announced as follows in accordance with the Enterprise Income Tax of the People's Republic of China and the Implementing Regulations thereof, and the Circular on Issues Concerning Treatment of Enterprise Income Tax in Enterprise Restructuring Business (Cai Shui [2009] No. 59, hereinafter referred to as the "Circular"):
Article 1 For the purposes of this Announcement, the term "equity transfer" shall refer to the circumstances of non-resident enterprises prescribed in Items 1 and 2 of Article 7 of the Circular. The circumstances prescribed in Item 1 of Article 7 of the Circular shall include equity transfer of Chinese resident enterprises resulting from the division or merger and acquisition of foreign enterprises.
Article 2 Non-resident enterprises that opt for the special tax treatment of equity transfer shall file a record upon the effectiveness of the equity transfer contract or agreement and within 30 days of the completion of the procedures for change of industry and commerce registration. In the circumstances prescribed in Item 1 of Article 7 of the Circular, the transferor shall file a record with the competent taxation authority of income tax at the place the transferred enterprise is located. In the circumstances prescribed in Item 2 of Article 7 of the Circular, the transferee shall file a record with the competent taxation authority of income tax at the place it is located.
The equity transferor or transferee may appoint an agent for filing. The agent shall present the written authorization of the filing party to the competent taxation authority at the time of handling filing on behalf of the transferor or transferee.
Article 3 The equity transferor, transferee or authorized agent (hereinafter referred to as the "Filing Party") shall complete the following information at the time of filing:
1. Filing Form for the Special Tax Treatment Applicable to Equity Transfer by Non-resident Enterprises (See Appendix I);
2. Explanation of the overall situation of equity transfer business, which shall include the commercial objectives of equity transfer, certification showing that equity transfer meets the conditions for the special tax treatment, company equity structure charts before and after equity transfer, etc.,
3. Equity transfer business contract or agreement (Chinese translation shall also be appended for foreign language text);
4. Certification of industry and commerce and other relevant departments for approval of matters for change of enterprise equity;
5. Information on undistributed profits of the transferred enterprise in all years as of the equity transfer;
6. Other materials required by the taxation authority.
Where the aforementioned information has been submitted to the competent taxation authority, the Filing Party may not make a submission again. Where the information is submitted to the taxation authority in duplicate copy, the Filing Party shall include the wording of "this duplicate is identical to the original copy" on the duplicate and sign and affix the seal of the Filing Party. Where the Chinese translation is submitted, the Filing Party shall include the wording of "this translation is identical to the contents of the original copy" and sign and affix the seal of the Filing Party.
Article 4 The competent taxation authority shall accept filing in accordance with provisions. Where the information is complete, it shall sign and affix the seal on the Filing Form for the Special Tax Treatment Applicable to Equity Transfer by Non-resident Enterprises on the spot and return one copy to the Filing Party. Where the information is incomplete, it shall not accept filing and shall inform the Filing Party of the matters to be supplemented.
Article 5 Where equity transfer by non-resident enterprises is in the circumstances of Item 1 of Article 7 of the Circular, the competent taxation authority shall conduct investigation for verification and provide opinions on treatment of the filing matters within 30 working days of acceptance, and submit all filing materials and opinions on treatment to the taxation authority of province (including autonomous region, municipality directly under the Central Government and cities specifically designated in the state plan, hereinafter the same).
Where the taxation authority conducts investigation for verification and finds that such circumstances of equity transfer shall change the tax burden on the provision for the proceeds from such circumstances of equity transfer thereafter, including equity transfer by the transferor from taxable country or region to non-taxable or low tax rate country or region, the special tax treatment shall not apply.
Article 6 Where equity transfer by non-resident enterprises is in the circumstances of Item 2 of Article 7 of the Circular, the following two circumstances shall be distinguished for treatment:
1.
......
Announcement of the State Administration of Taxation [2013] No. 72
December 12, 2013
In order to regulate and strengthen the administration of the special tax treatment applicable to equity transfer by non-resident enterprises, the relevant issues are hereby announced as follows in accordance with the Enterprise Income Tax of the People's Republic of China and the Implementing Regulations thereof, and the Circular on Issues Concerning Treatment of Enterprise Income Tax in Enterprise Restructuring Business (Cai Shui [2009] No. 59, hereinafter referred to as the "Circular"):
Article 1 For the purposes of this Announcement, the term "equity transfer" shall refer to the circumstances of non-resident enterprises prescribed in Items 1 and 2 of Article 7 of the Circular. The circumstances prescribed in Item 1 of Article 7 of the Circular shall include equity transfer of Chinese resident enterprises resulting from the division or merger and acquisition of foreign enterprises.
Article 2 Non-resident enterprises that opt for the special tax treatment of equity transfer shall file a record upon the effectiveness of the equity transfer contract or agreement and within 30 days of the completion of the procedures for change of industry and commerce registration. In the circumstances prescribed in Item 1 of Article 7 of the Circular, the transferor shall file a record with the competent taxation authority of income tax at the place the transferred enterprise is located. In the circumstances prescribed in Item 2 of Article 7 of the Circular, the transferee shall file a record with the competent taxation authority of income tax at the place it is located.
The equity transferor or transferee may appoint an agent for filing. The agent shall present the written authorization of the filing party to the competent taxation authority at the time of handling filing on behalf of the transferor or transferee.
Article 3 The equity transferor, transferee or authorized agent (hereinafter referred to as the "Filing Party") shall complete the following information at the time of filing:
1. Filing Form for the Special Tax Treatment Applicable to Equity Transfer by Non-resident Enterprises (See Appendix I);
2. Explanation of the overall situation of equity transfer business, which shall include the commercial objectives of equity transfer, certification showing that equity transfer meets the conditions for the special tax treatment, company equity structure charts before and after equity transfer, etc.,
3. Equity transfer business contract or agreement (Chinese translation shall also be appended for foreign language text);
4. Certification of industry and commerce and other relevant departments for approval of matters for change of enterprise equity;
5. Information on undistributed profits of the transferred enterprise in all years as of the equity transfer;
6. Other materials required by the taxation authority.
Where the aforementioned information has been submitted to the competent taxation authority, the Filing Party may not make a submission again. Where the information is submitted to the taxation authority in duplicate copy, the Filing Party shall include the wording of "this duplicate is identical to the original copy" on the duplicate and sign and affix the seal of the Filing Party. Where the Chinese translation is submitted, the Filing Party shall include the wording of "this translation is identical to the contents of the original copy" and sign and affix the seal of the Filing Party.
Article 4 The competent taxation authority shall accept filing in accordance with provisions. Where the information is complete, it shall sign and affix the seal on the Filing Form for the Special Tax Treatment Applicable to Equity Transfer by Non-resident Enterprises on the spot and return one copy to the Filing Party. Where the information is incomplete, it shall not accept filing and shall inform the Filing Party of the matters to be supplemented.
Article 5 Where equity transfer by non-resident enterprises is in the circumstances of Item 1 of Article 7 of the Circular, the competent taxation authority shall conduct investigation for verification and provide opinions on treatment of the filing matters within 30 working days of acceptance, and submit all filing materials and opinions on treatment to the taxation authority of province (including autonomous region, municipality directly under the Central Government and cities specifically designated in the state plan, hereinafter the same).
Where the taxation authority conducts investigation for verification and finds that such circumstances of equity transfer shall change the tax burden on the provision for the proceeds from such circumstances of equity transfer thereafter, including equity transfer by the transferor from taxable country or region to non-taxable or low tax rate country or region, the special tax treatment shall not apply.
Article 6 Where equity transfer by non-resident enterprises is in the circumstances of Item 2 of Article 7 of the Circular, the following two circumstances shall be distinguished for treatment:
1.
......