Circular of the Ministry of Finance and the State Administration of Taxation on the Calculation and Collection of Enterprise Income Tax after Payment of Business Tax on Royalty Obtained by Foreign Enterprises

Circular of the Ministry of Finance and the State Administration of Taxation on the Calculation and Collection of Enterprise Income Tax after Payment of Business Tax on Royalty Obtained by Foreign Enterprises


Circular of the Ministry of Finance and the State Administration of Taxation on the Calculation and Collection of Enterprise Income Tax after Payment of Business Tax on Royalty Obtained by Foreign Enterprises

Cai Shui Zi [1998] No. 59

March 19, 1998

The financial departments (bureaus), the offices of the State Administration of Taxation and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the State plan, and the financial bureau of Xinjiang Production and Construction Corp.,

Tax treatment issues on the calculation and collection of enterprise income tax after payment of business tax on royalty obtained by foreign enterprises from transfer of intangible assets within the territory of China are hereby notified as follows:

Where foreign corporations and enterprises which have not set up institutions and workplaces within the territory of China obtain royalty from sources within the territory of our country, or the aforesaid income has no actual relationship with such institutions and workplaces though they have been set up, the payable business tax may be deducted in accordance with the provisions of the Interim Regulations of the People's Republic of China on Business Tax
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