Circular on Some External Taxation Policy Questions Concerning Pilot Enterprises Experimenting with the Shareholding System
Circular on Some External Taxation Policy Questions Concerning Pilot Enterprises Experimenting with the Shareholding System
Circular on Some External Taxation Policy Questions Concerning Pilot Enterprises Experimenting with the Shareholding System
Guo Shui Fa [1993] No.139
December 3, 1993
Tax bureaus of provinces, municipalities directly under the Central government, and autonomous regions, and tax bureaus of municipalities with independent planning status, and all branches of the Offshore Oil Tax Administration
In accordance with the stipulations of the Circular of the State Administration of Taxation on the Shareholding System Pilot Enterprises Applicable Taxation Legal Question, a document Coded Guo Shui Fa [1993] No. 087, we hereby clarify as follows the taxation policy question related to shareholding enterprises which pay various taxes in light of the external tax law:
I. The taxation handling of asset revaluation and variable-value
1. With regard to enterprise with foreign investment which are reorganized or merged with other enterprises into shareholding enterprises, and the original enterprise with foreign investment which have cancelled registration with the administrative department for industry and commerce, their changed value of subscribed shares used as investment and their book value shall be included in gains and losses of the original enterprise with foreign investment, and on the basis of which enterprise income tax is calculated and paid.
2. If the original enterprise with foreign investment has conducted taxation handling in accordance with the stipulations of the above clause, the newly organized shareholding enterprise may reevaluate the assets of the original enterprise with foreign investment and affirm their value and enter it as investment into the account book and, on the basis of which calculate the depreciation or amortization of the assets; if the original enterprise with foreign investment has not conducted taxation handling in accordance with the stipulations of the above clause, that changed value of the assets of the original enterprise with foreign investment, which is reassessed by the newly organized shareholding enterprise, shall be readjusted in light of the method stipulated in Clause (3) of this Article.
3.
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