Circular of the State Administration of Taxation on Several Issues Concerning Business Tax Policies for Foreign-Invested Financial Institutions

Circular of the State Administration of Taxation on Several Issues Concerning Business Tax Policies for Foreign-Invested Financial Institutions

Guo Shui Fa [2000] No.135

July 8, 2000

With the increase of foreign investment and foreign financial enterprises in China (hereinafter referred to as "foreign-invested financial institutions"), and the expansion of the business scope, there are some problems arising gradually in the course of collecting the business tax from these financial institutions. Some relevant issues are specified as follows to facilitate the implementation of policies:

Article 1 Issues concerning the levy of business tax on off-shore bank business of a foreign-invested financial institution
In accordance with Article 7 of the Implementation Rules of Tentative Regulations for Business Tax of the People's Republic of China and the principle that the location of financial institutions shall be the place where labor services occur as specified by relevant provisions of the Circular on Weather to Impose Business Tax on the Interests and Rental Obtained by Foreign Enterprises in the People's Republic of China (Guo Shui Fa [1997] No.035), the off-shore bank business conducted by domestic foreign-invested financial institutions shall taxable labor services provided in China and the interest thereof shall be subject to the business tax in accordance with relevant regulations.
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