Circular of the Ministry of Finance and the State Administration of Taxation on Issues Concerning Enterprise Income Tax of Telecommunication Enterprises

Circular of the Ministry of Finance and the State Administration of Taxation on Issues Concerning Enterprise Income Tax of Telecommunication Enterprises

Cai Shui [2004] No. 215

December 10, 2004

The finance 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.,

For the purposes of supporting the development and fair competition of telecommunication enterprises, according to provisions of current income tax policies and through discussion, the issues concerning the deduction of relevant expenses prior to payment of enterprise income tax of telecommunication enterprises:

Article 1 Issues concerning income tax treatment on discounts provided in offering bundled telecommunication products and services in marketing
During the development of telecommunication enterprises, in order to keep regular users and develop new users or to encourage users to register in the telecommunication network and to extend the using scope of new telecommunication business, by using marketing methods such as customer accumulative points plan, telecommunication enterprises provide users with some certain consumer scale with discounts on time, flow rate or project service fee of certain amount, and other expenses caused by adopting such bundled marketing methods as providing telephone equipments or other things, or communication card of value, etc., the same discounts and expenses shall be deemed as business discounts or costs eligible for pre-tax deduction.
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