企业所得税实施细则)CIT Implication Rul.ppt

Dezan Shira & Associates CHINA TAX OVERVIEW & CIT UNIFICATION UPDATE 2007 Dezan Shira & Associates Ltd. All rights reserved. 1 Index Part OneChina CIT Unification Part ThreeImplementation Rule of EIT & FEIT v.s. New Rule 2 Part One China CIT Unification 3 Part One: China CIT Unification 5Expenses Deduction 4 Grandfathering Rule 3 1 2 Residence Concept Tax Rate Tax Incentives 4 Residence Concept Item Definition Tax Implication China tax resident Enterprises established in China Tax on worldwide income Foreign enterprises established outside China but its effective management is based in China Non-China tax resident Enterprises established outside China Tax on China- sourced income 5 Example Help You to Understand the Definition 6 Conclusion of the Sample Source of Income Current Tax LawNew Law Income derived from ChinaPE, pay taxPay tax as residence Income derived from outside China ExemptionPay tax as residence 7 5Expenses Deduction 4 Grandfathering Rule 3 1 2 Residence Concept Tax Rate Tax Incentives Part One: China CIT Unification 8 Main ChangesTax Rate ItemTax rateApplicable Enterprises Standard Rate25% Most enterprises Reduced Rate20% Small and thin-profit enterprises Withholding Income Tax (“WHT”) 20% (Reduced to 10%) Incomes derived from profits, interest, rentals, royalties and other incomes from sources in China. 9 Illustration for small and thin profit enterprise Tax rate 20% n Recognition criteria For manufacturing enterprises Total assets RMB 2000 Usage period 2 years Same with EIT. No limitation on non- production assets. 50 Tax incentive Resource utilization EIT FEITNew Rule Income generated from productions using resources indicated in “Resource utilization list” which beyond the designed products- 5 years EIT exemption Income generated from construction products production using large volume of coal gangue, steel slag, pulverized coal ash as main raw materials- 5 years EIT exemption Enterprises for processing or utilizing disposed resource -1 year exemption N/A If enterprises produce with resources defined in “ Resource utilization tax inventive list” and products satisfies Nations relevant regulations 90% revenue are taxed 51 Tax incentive Environment protection equipments,