Preferential Enterprise Income Tax Policies for Advanced Technology Service Enterprises within Pilot Regions Carrying out Innovative Development of Trade in Services Clarified
Recently, five departments including the Ministry of Finance have issued the Circular on Promoting Preferential Enterprise Income Tax Policies for Advanced Technology Service Enterprises within Pilot Regions Carrying out Innovative Development of Trade in Services (the "Circular").
According to the Circular, from January 1, 2016 to December 31, 2017, preferential enterprise income tax policies will be implemented in 15 regions that carry out the pilot program for innovative development of trade in services, such as Tianjin, Shanghai, Hainan, Shenzhen, Hangzhou, Wuhan, Guangzhou, Chengdu, Suzhou, Weihai, new district in Harbin, Jiangbei New District, Liangjiang New District, Guian New District, Xixian New District. Firstly, eligible advanced technology service enterprises shall be subject to enterprises income tax at a reduced rate of 15%. Secondly, for eligible advanced technology service enterprises, their expenditures from the employee educational funds actually incurred are deductible to the extent of the portion that accounts for 8% of the total salaries, while calculating the taxable income. The excessive portion is allowed to be carried forward to future tax years.