Circular of the State Administration of Taxation on Relevant Tax Treatment Issues relating to the Operation of Foreign-Invested Enterprises on a Contract or Lease Basis
Circular of the State Administration of Taxation on Relevant Tax Treatment Issues relating to the Operation of Foreign-Invested Enterprises on a Contract or Lease Basis
Circular of the State Administration of Taxation on Relevant Tax Treatment Issues relating to the Operation of Foreign-Invested Enterprises on a Contract or Lease Basis
Guo Shui Fa [1995] No. 45
March 7, 1995
The state taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan,
In order to strengthen tax administration, relevant tax treatment issues relating to the operation of foreign-invested enterprises on a contract or lease basis by are hereby clarified anew in accordance with relevant provisions of China's tax laws as follows:
I. Where, notwithstanding the fact that a foreign-invested enterprise contracts target responsibilities to any of its own employees or engages an outside management service company to be in charge of the whole or part of its own operational and management activities, various business activities continue to be carried out in the name of the foreign-invested enterprise and service compensation for the individual or service fees for the company is paid at a fixed rate or on the basis of the operational or management performance, the foreign-invested enterprise should treated as a taxpayer to calculate and pay turnover tax and enterprise income tax in accordance with relevant provisions of tax laws and be entitled to applicable tax preferential treatments. Service compensation to the foregoing individual or service fees to the foregoing company paid by the foreign-invested enterprise may be included in expenses in calculating enterprise income tax for such foreign-invested enterprise.
......
Guo Shui Fa [1995] No. 45
March 7, 1995
The state taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan,
In order to strengthen tax administration, relevant tax treatment issues relating to the operation of foreign-invested enterprises on a contract or lease basis by are hereby clarified anew in accordance with relevant provisions of China's tax laws as follows:
I. Where, notwithstanding the fact that a foreign-invested enterprise contracts target responsibilities to any of its own employees or engages an outside management service company to be in charge of the whole or part of its own operational and management activities, various business activities continue to be carried out in the name of the foreign-invested enterprise and service compensation for the individual or service fees for the company is paid at a fixed rate or on the basis of the operational or management performance, the foreign-invested enterprise should treated as a taxpayer to calculate and pay turnover tax and enterprise income tax in accordance with relevant provisions of tax laws and be entitled to applicable tax preferential treatments. Service compensation to the foregoing individual or service fees to the foregoing company paid by the foreign-invested enterprise may be included in expenses in calculating enterprise income tax for such foreign-invested enterprise.
......