This English document is coming from the "LAWS AND REGULATIONS OF THE
This English document is coming from the "LAWS AND REGULATIONS OF THE
PEOPLE'S REPUBLIC OF CHINA GOVERNING FOREIGN-RELATED MATTERS" (1991.7)
which is compiled by the Brueau of Legislative Affairs of the State
Council of the People's Republic of China, and is published by the China
Legal System Publishing House.
In case of discrepancy, the original version in Chinese shall prevail.
Whole Document
REPLY OF THE STATE COUNCIL TO THE REPORT SUBMITTED BY THE MINISTRY
OF FINANCE REQUESTING THE INSTRUCTION ON THE REDUCTION OF THE APPRAISED
AND SPECIFIED RATE OF PROFIT FOR TAXATION ON THE RESIDENT REPRESENTATIVE
OFFICES OF FOREIGN ENTERPRISES
(September 29, 1986)
The State Council hereby approves the following amendment to the Interim
Provisions of the Ministry of Finance of the People's Republic of China
concerning the Imposition of Consolidated Industrial and Commercial Tax
and Enterprise Income Tax on the Resident Representative Offices of
Foreign Enterprises: The provisions in Article 4 which read, "tax shall
...... be calculated and determined on the basis of an appraised and
specified rate of profit, provisionally determined to be 15% of the amount
of business revenue", shall be amended as follows: "tax shall ...... be
calculated and determined on the basis of an appraised and specified rate
of profit, provisionally determined to be 10% of the amount of business
revenue". The aforesaid amendment shall be announced by your Ministry, and
the amendment shall become effective as of October 1, 1986.
Appendix:
CIRCULAR OF THE MINISTRY OF FINANCE CONCERNING THE REDUCTION OF THE
APPRAISED AND SPECIFIED RATE OF PROFIT FOR TAXATION ON THE RESIDENT
REPRESENTATIVE OFFICES OF FOREIGN ENTERPRISES
(October 6, 1986)
With the approval of the State Council, this Ministry promulgated, on May
15, 1985, Interim Provisions Concerning the Imposition of Consolidated
Industrial and Commercial Tax and Enterprise Income Tax on the Resident
Representative Offices of Foreign Enterprises, and Article 4 of these
Provisions stipulates "in respect of the assessment of enterprise income
tax, except for those cases in which accurate cost and expense vouchers
can be provided and where the correct amount of tax can be calculated, tax
shall, in accordance with the provisions of Article 24 of the Rules for
the Implementation of the Income Tax Law of the People's Republic of China
for Foreign Enterprises, be calculated and determined on the basis of an
appraised and specified rate of profit, provisionally determined to be 15%
of the amount of business revenue." In order to further encourage the
aforesaid representative offices to expand business operations, and in
consideration of the actual condition of the differences in profit rates
between the representative offices, it is decided, with the approval of
the State Council, to reduce, for the benefit of the resident
representative offices, the appraised and specified rate of profit from
15% to 10%.
This Provision shall become effective as of October 1, 1986.
ified rate of profit from
15% to 10%.
This Provision shall become effective as of October 1, 1986.
plementation of the Income Tax Law of the People's Republic of China
for Foreign Enterprises, be calculated and determined on the basis of an
appraised and specified rate of profit, provisionally determined to be 15%
of the amount of business revenue." In order to further encourage the
aforesaid representative offices to expand business operations, and in
consideration of the actual condition of the differences in profit rates
between the representative offices, it is decided, with the approval of
the State Council, to reduce, for the benefit of the resident
representative offices, the appraised and specified rate of profit from
15% to 10%.
This Provision shall become effective as of October 1, 1986.
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