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Articles of Tax Policy on Boosting the Development of Modern Service Industries


Release time: Sep 26, 2018



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1. To support the development of modern logistics

(1) Where the transportation business is subcontracted by a transport company to other units, the Business Tax shall be calculated and collected from the balance, with the total revenue of the company less the freight paid to other transport companies.

(2) Where the warehousing business is subcontracted by a pilot enterprise to other units, the Business Tax shall be calculated and collected from the balance, with the total revenue that the company receives less the storage fees paid to other storage companies.

(3) The cargo transportation enterprises invested in by foreign investors, are identically deemed as the self-billing taxpayers.

(4) For the foreign enterprises which make profit from shipping passengers, cargos or parcel posts from a Chinese port to abroad, the Business Tax shall be exempted for those meeting the agreed conditions in accordance with the Double Taxation Avoidance Agreement, the Mutual Exemption Concerning International Shipping Income Agreement, Shipping Agreement and other relevant agreements, or the exchange of notes that China has made with other countries or regions.

2. To promote the development of the Convention and Exhibition Industry

(5) As of April 1, 2008 the Business Tax of the Convention and Exhibition Industry shall be collected under the “services-agencies” tax items. The taxable amount shall be the balance of the full price and the additional charges that the organizers get directly from the exhibitors, less the venue rental, booth construction fees, advertising fees, transportation fees and accommodation fees.

3. To support the development of the Agency Industry

(6) The amount of business of an advertising agency shall be the balance after the gross revenue less its payment to other advertising companies or advertising release enterprises (including media and carriers), for the release of advertisement.

(7) The Business Tax of the customs agents shall be the balance of the full charges and the additional fees that the taxpayers have received from the clients less the fees paid for the following items: the tax paid to the customs, visa fees, fees for delayed declaration, late fees, inspection fees, document issuance fees, electronic declaration charges, storage charges; the three inspection fees, fumigation fees, disinfection fees, e-insurance platform fees paid to the inspection and quarantine authority; the pre-entry fees paid to the pre-recorded unit and other fees set by the State Administration of Taxation.

(8) For the taxpayers of the non-vessel shipping operators, the Business Tax shall be declared and collected from the balance of the full charges and additional fees that they have received from the clients, less the ocean freight and charges paid for declaration, port complex and loading and unloading.

(9) For the patent agencies which are engaged in patent agent services, the Business Tax shall be calculated from the balance of the gross revenue which they’ve received from their clients less the patent fees paid to the State Intellectual Property Office.

(10) For the taxpayers that are engaged in the trade mark agency services, the Business Tax shall be calculated from the balance of the total revenue after the deduction of fees for trademark registration paid to the Trademark Office.

(11) The amount of business of a service entity engaging in catering intermediary service shall be the intermediary business service fees that are actually collected from the commissioning party and the catering enterprises, not including the transfer payment of the expenses previously received from the commissioning party.

4. To support the development of tourism

(12) Urban Land Use Tax is exempted for the land occupied by parks, zoos and other tourist attractions.

(13) Where a tourism enterprise organizes a trip within the People’s Republic of China for a tour group, the Business Tax shall be calculated from the balance of all the travel expenses charged from the tourists less the payment to other units for accommodation, meals, transportation, tickets or to other agencies meeting the tour groups.

(14) If a taxpayer organizes a trip outside the People’s Republic of China for a tour group and such group is met outside the People’s Republic of China by another tourism enterprise, the amount of business shall be the price for the entire tour less the tour price paid to such enterprise meeting the tour group.

5. To support the development of the Finance and Insurance Industry

(15) Pilot enterprises for finance lease confirmed by the Ministry of Commerce and the State Administration of Taxation shall enjoy preferential business tax policies on the finance leases as provided.

(16) The Business Tax of the non-profit credit guarantees and re-guarantees institutions for small and medium-sized enterprises within the scope of the pilot nationwide, shall be exempted for three years after the completion of procedures for tax exemption in the local tax authority, provided that the guaranteed and re-guaranteed business income (not including the credit rating, advisory and training income) meets the standard made by the local government above the municipal level.

(17) Those who acquire, undertake and handle the bad assets of Cinda, Huarong, Great Wall and China Orient Asset Management Corporation shall enjoy preferential treatment in taxation.

(18) Business Tax is exempt from the Insurance Salesmen (non-employees) whose monthly commission income does not reach the taxable threshold.

(19) Those Foreign financial institutions and Insurance companies which set up management institutions in Guangdong Province, but which have difficulty in paying city property tax, may be considered for a reduction in or exemption of their property tax, shall be granted upon the approval of the tax authorities.

(20) Personal Income Tax is temporarily exempt from individuals who obtain income from the security and investment funds allocation. Prior to the restoration of Personal Income Tax on margins from stocks, the Personal Income Tax is temporarily exempt from the individual investors who get margins from the purchase and redemption of funds.

6. To support the development of the Production & Service enterprises

(21) The Corporate Income Tax is exempt from the newly built software product companies and the integrated circuit design enterprises since the first and second profit making year and the Corporate Income Tax is halved between the third and fifth profit making year, once they are confirmed.

(22) Where the research and development costs of the new technologies, products and industrial arts of the production and service enterprises are not to be calculated into the current profits and losses as intangible assets, 50% of the R&D costs shall be deducted as provided. Otherwise, 150% of the intangible assets shall be amortized.

7. To support the rapid development of the Animation Industry

(23) Where the enterprises independently develop and produce the animation products which are related to taxable labor services of the Business Tax (excluding the advertising and entertainment industry), the Business Tax shall be reduced to 3%.

8. To support the development of the Technology Services Industry

(24) Where technology service enterprises on R&D, design and creativity are  confirmed as high-tech enterprises by the relevant authorities, preferential policies for high-tech enterprises shall be enjoyed according to the State rules.

(25) Where the survey and design projects are sub-contracted and on-contracted by a survey & design operation to other units or individuals, whose charges are paid by the entrusting party, the Business Tax of the operation shall be calculated from the balance of its gross income for survey and design with the deduction of payment for other units or individuals.

(26) Business Tax is exempt from units and individuals (excluding foreign enterprises or foreign individuals) whose revenues are obtained from technology transfer, technology development and other related technology consulting and services.

After the abolition of examination and approval procedures for the exemption of Business Tax, the written contract concerning the taxpayer’s technology transfer and technology development shall go through confirmation of registration procedures in authorities at all levels for technology contract registration and the identified contracts and relevant supporting materials shall go to the competent tax authorities for reference.

Where the taxpayer entrusts the commission agency for obtaining their visa, and the visa materials checklist issued by the intermediary complying with conditions for tax exemption, it shall go to the competent tax authorities for reference.

(27) As of January 1, 2008 to December 31, 2010, Business Tax is exempt from the National University Science Park and the Technology Business Incubator, which get revenue from renting sites, houses and providing incubator services. Besides, the City Maintenance and Construction Tax and the Educational Surcharges that attached to the Business Tax are also exempted. The Property Tax and Urban Land Use Tax are exempted from Technology Business Incubator and National University Science Park, which use or provide property and land to incubator companies for free, or by means of rental.

(28) Where Venture capital companies take equity investment in unlisted small and medium high-tech enterprises for more than 2 years, the taxable income shall be offset by 70% of its investment in the second full year of the shareholdings. If it’s not enough for offsetting, deduction shall be taken in the future tax years.

(29) Corporate Income Tax shall be exempted or deducted from enterprises which are engaged in agriculture, forestry and animal husbandry. Where enterprises engaged in mechanized farming, irrigation, agriculture & animal husbandry insurance, the related technical training services or the hybridization and disease control of poultry, livestock and aquatic animals, is Business Tax exempted.

(30) Where the foreign enterprises accepting the commission of domestic Chinese enterprises to carry out construction and engineering project design, with all the design proposal, calculation and drawing all conducted outside the People’s Republic of China except for the site investigation, information gathering and situation understanding conducted in China by foreign personnel before design, and upon completion, the drawings are delivered to the domestic Chinese enterprises, such situation can be deemed as services provided outside the People’s Republic of China and the Business Tax is exempt from the overall design income that the foreign investors get in China.

(31) Business Tax is exempt for foreign enterprises and foreign individuals, who obtain  income from technology transfer within the territory of People’s Republic of China, provided that they provide the written contract about technology transfer and development or identification certificates and other supporting documents issued by the state authorities (including technology administration at the provincial level or the Ministry of Commerce or its authorized local departments of foreign trade) and go through registration procedures for reference.

(32) As for the research and development funds resulted from developing new products and technologies by the scientific research institutes and colleges, which are funded by the non-associated individuals and individual businesses, their total expenditures can be deducted from the taxable income of the personal tax income in the current year. If the taxable income in the current year is not enough for deduction, deductions shall not be carried over.

9. To support the development of Medical and Health Services

(33) Where the for-profit medical institutions provide medical services to get income, which goes directly for improving medical and health conditions, Business Tax is exempt within three years since the obtaining date of the registration certificate. Property Tax and Urban Land Use Tax are also exempt within three years for their personal used property and land. 

(34) Property Tax and Urban Land Use Tax are exempt from the personal used property and land by such health institutions as the disease control agencies, maternal and child health institutions and other non-profit medical institutions.

(35) According to the stipulations of the Enterprise Income Tax, the income obtained from engaging in non-profit activities by such health institutions as the disease control institutions, maternal and child health institutions and other non-profit medical institutions is tax-free income.

(36) As of January 1, 2000, individual donations to the Red Cross through non-profit social organizations and state organs (including Red Cross Society of China), are allowed to be fully deducted in the calculation of the Individual Income Tax.

(37) The public welfare relief donations made by individuals through the China Health and Medical Development Foundation, are allowed to be fully deducted prior to the payment of Personal Income Tax.

10. To encourage and support the development of the Cultural and Educational Industries 

(38) Business Tax is exempt from schools which are engaged in academic education and through which they are providing education services.

(39) Business Tax is exempt from the labor services income of students under work-study programs.

(40) As of January 1, 2006 to December 31, 2008, Business Tax is exempt from admission fees made by the Science and Technology Museum and Museum of Natural History which are identified as science education based after application, by the planetarium(astronomical observatory), ,seismic station and meteorological station open to the public and by universities and research institutions open to the public as the science education base as well as by party or government departments beyond the county level and the CAST( China Association for Science and Technology), which get admission fees through carrying out activities for promoting science education.

(41) The following donations of a taxpayer that are within 30% of the personal income tax which is liable to tax are granted to be deducted prior to paying tax:

I. The public welfare and relief donations to the education and civil affairs departments and areas affected by natural disasters and poverty-stricken areas by way of the Guanghua Science and Technology Foundation.

II. Donations to the following publicity and cultural undertakings by way of China Foundation for the Development of Social Culture: 

(i) donations to the national symphony orchestra, corps de ballet, opera, Peking Opera and other folk art performance group;

(ii) donations to the public libraries, museums, science and technology museums, art galleries, Revolutionary History Memorial Halls;

(iii) donations to the key institutions of cultural relics protection; 

(iv) donations to the social public welfare activities,  projects or cultural facilities that are associated with non-profit cultural centers and mass art centers, which are affiliated by the departments for cultural administration.

III. Public donations to the publicity and cultural undertakings made by the non-profit public service   organizations or national organs which are established upon the approval of the state authorities as of January 1,2006 to December 31, 2010; the scope of the publicity and cultural undertakings includes: 

(i) donations to the national symphony orchestra, corps de ballet, opera, Peking Opera and other folk art performance group;

(ii) donations to the public libraries, museums, science and technology museums, art galleries, Revolutionary History Memorial Halls;

(iii) donations to the key institutions of cultural relics protection; 

(iv) donations to the social public welfare activities,  projects or cultural facilities that are associated with    non-profit cultural centers and mass art centers, which are affiliated by the departments for cultural  administration.

(42) As of January 1, 2000, the individual donations to the youth activities centers (including the newly-built ones) are granted to be fully deducted when paying the personal income tax.

(43) The following donations of a taxpayer are granted to be fully deducted prior to the payment of personal income tax:

I. As of July 1,2001, donations concerning the rural compulsory educations to the elementary and middle schools in the villages and towns (excluding the towns where the county government or the county-level city government are located), that are set up by governments or social forces and to other special education schools that provide educations at the same stage by way of the non-profit social organizations and state organs. 

II. As of January 1, 2004, donations made to the educational undertakings by way of the non-profit social organizations and state organs within the territory of People’s Republic of China.

(44) As of January 1, 2006, individual donations for public welfare relief through China Education Development Foundation are granted to be fully deducted prior to the payment of the personal income tax.

(45) As of January 1, 2006 to December 31, 2008, the following tax preference is granted to the reforms of the university logistics:

I. property tax is exempt from student apartments which provide accommodations for students and charge fees according to the charging standard of the higher education systems. Property Tax and Urban Land Use Tax are exempt from the personal used property and land which belong to the economic entity (hereinafter referred to as university logistics entity) of university logistics that are separated from the management department of the university logistics and established with independent accounting and possessing status of legal persons

II. Stamp Duty is exempt from the apartment lease contract which is signed with the college students.

III. Business Tax is exempt from the rental and service income made by the university logistics entity through operating students apartments and teachers’ apartments or by providing logistics service for college teaching. However, as for the rental and other service incomes obtained by providing services to social personnel through using the students’ apartments and the teachers’ apartments, business tax shall be collected according to the current regulations. Business Tax is exempt from the rental income of the students’ apartments which are established by social investment and provide accommodation services for college students, to whom uniform fees are charged according to the charging standard of higher education systems. However, business tax shall be calculated and collected in accordance with the current regulations for the rental income which is made through providing accommodation services to the social personnel with the students’ apartments. Business Tax is exempt from income of the canteens which are located at the campus with social management and independent accounting and provide catering services to students and teachers while business tax shall be calculated and collected for the income made through providing catering services to society.

11. To support the development of civil aviation and port construction

(46) Where bases of civil aviation companies are constructed on the Baiyun International Airport,, business tax is exempt from the airfield land (including runways, taxiways, landing field, safety belt and night flight lighting area), land for OTC communication and navigation facilities inside and outside the airport and the surrounding areas of the airfield with drainage and flood control facilities. The airport roads are divided into on-site roads and off-site roads. Land Use Tax is exempt from the off-site roads while the on-site roads shall pay Land Use Tax in accordance with the regulations.

(47) As for the charter business (refers to the charter companies sign an agreement with aviation transport companies, according to which the latter is responsible for carrying passengers or cargo while the former charges transport fees from the passengers or the cargo owners and pay the fixed charter fees to the former) carried out by the charter companies, business tax shall be collected under the item of “services-agents” and the amount of business shall be the full price and the additional charges that are collected from the passengers and the cargo owners less the chart fees paid to the aviation transport companies.

(48)  For Hong Kong enterprises engaged in chartered airplane services, 50% of their total air ticket sales for trips between Hong kong and the mainland China (including tickets sold in Hong Kong, mainland China and other places) shall be set as their turnover, out of which 3% are levied as business tax.

(49) For the foreign airport companies which make profit from carrying passengers, cargos or parcel posts from within China, the Business Tax shall be exempted for those meeting the agreed conditions specified in the Double Taxation Avoidance Agreement, the Agreement for Mutual Exemption of tax on air transport income, Air Service Agreement and other relevant agreements or in the exchange of notes that China has made with other countries or regions.

(50) Upon the approval of the tax authorities, Urban Property Tax shall be exempt from the real estate invested by the foreign enterprises in the ports and docks or in Chinese airports.

12. To encourage and attract the development of big companies and institutions which provide services

(51) Personal Income Tax is exempt from the income of foreign teachers and researchers who conduct teaching and researches in China, where they are engaged by the educational institutions and research organizations meeting certain conditions and their residence time in China is shorter than that specified in the regulations.

(52) As of July 1, 1999, where scientific research institutions and institutions of higher education award individuals with equity forms such as shares or ration of investment and the like, Personal Income Tax is exempt from winners on the receipt of shares and ratio of investment; the Personal Income Tax is paid in line with laws only when they receive the dividends according to their shares and capital contributions or when they get income from assigning their shareholding rights and capital contributions.

(53) Where a foreign investment company, on behalf of its subsidiaries, signs contracts with other enterprises and receives service together with its subsidiaries from other enterprises, the service charge reclaimed by the foreign investment company from its subsidiaries shall not be incorporated into the foreign investment company’s income and shall not generate any business tax.

(54) Where representative organizations which are established in Guangzhou by foreign governments, international institutions non-profit institutions and non-governmental organizations and are engaged in non-taxable business activities, such representative organizations (or their head offices, or their superior departments) shall lodge the application of exemption from business tax to the competent tax authorities and the application shall go to the tax authorities at the provincial level for approval.

13.  In case of any reform of tax systems by the State hereafter, tax preferential policies shall be carried out in accordance with the new tax policies.