Announcement of the State Taxation Administration on Issuing the Amended Measures for the Administration of Preferential Policies on Enterprise Income Tax

　　Announcement of the State Taxation Administration on Issuing the Amended Measures for the Administration of Preferential Policies on Enterprise Income Tax

　　STA Announcement No. 23, 2018

　　To optimize taxation environment and effectively implement all preferential policies on enterprise income tax, according to relevant instructions under the Opinions of State Taxation Administration on Further Deepening the Reform of "Streamlining Administration, Delegating Power, Strengthening Regulation and Improving Service" in Tax System and Optimizing the Tax Environment (SZF (2017) No.101), the amended Measures for the Administration of Preferential Policies on Enterprise Income Tax is hereby issued.

　　It is hereby notified.

　　State Taxation Administration

　　April 25, 2018

　　Measures for the Administration of Preferential Policies on Enterprise Income Tax

　　Article 1 To respond to the "streamlining government and delegating authority", "delegating power and strengthening regulation" and "optimizing services" requirements of the State Council and standardize the processing under the preferential policy on enterprise income tax ("preferential items"), in accordance with the Enterprise Income Tax Law of the People's Republic of China (the "Enterprise Income Tax Law") and its implementation rules and the Law of the People's Republic of China on the Administration of Tax Collection (the "Law on Administration of Tax Collection") and its implementation rules, these measures are hereby made.

　　Article 2 Preferential items hereunder refer to those specified under the Enterprise Income Tax Law, and those regard to enterprise income tax authorized by the State Council and governments of the national autonomous areas based on the Enterprise Income Tax Law, covering tax-free income, deductible income, additional deductions, accelerated depreciation, income calculation reduction, taxable income deduction, tax rate reduction, tax credit, etc.

　　Article 3 For names, policy overviews, main policy bases, main materials to be retained for review, preferential period and follow-up management requirements of the preferential items, see the Management Catalogue of Enterprise Income Tax Preferential Items (2017) (the "Catalogue") attached to this Announcement.

　　The Catalogue is prepared and updated by the State Taxation Administration.

　　Article 4 To enjoy the preferential items, enterprises need to "determine preferential items they are entitled to by their own judgment, report to enjoy such preferential items and retain materials needed for review". Enterprises should judge if they are entitled to the preferential items based on their operations and relevant taxation rules, and those entitled could calculate by themselves the deductible tax within time limits under the Catalogue, and enjoy such preferential items by filling in the enterprise income tax return. Meanwhile, they should collect and retain relevant materials for review according to these Measures.

　　Article 5 Materials retained for review referred to herein include contracts, agreements, vouchers, certificates, documents, account books, descriptions and other materials related to preferential items enterprises are entitled to. Materials retained for review fall into the primary materials retained for review and other materials retained for review. Primary materials retained for review are to be collected according to the materials list set out in the Catalogue, and other materials retained for review are to be supplemented by enterprises based on their preferential items.

　　Article 6 Enterprises enjoying preferential items should collect and organize all materials retained for review after the final annual settlement, for review by the tax authority.

　　Article 7 Enterprises enjoying multiple preferential items or one such item which is broken down for calculation as required, should collect and retain materials needed by item or item breakdown.

　　Article 8 Resident enterprises with non-legal-entity branches and non-resident enterprises with institutions and premises paying tax collectively, if they enjoy preferential items, should demand that their head offices or their main institutions and premises in charge of collective tax payment gather and retain materials for review. Where branches of resident enterprises and institutions & premises in the collective tax payment of non-resident enterprises are entitled to preferential items as required, such branches and institutions & premises should gather and retain materials for review, and submit the list of materials retained to the head offices and the primary institutions and premises in charge of collective tax payment after the final settlement.

　　Article 9 Enterprises assume legal responsibilities for the authenticity and legality of materials retained for review for the preferential items.

　　Article 10 Materials enterprise retain for review regard to their preferential items should be retained for 10 years since the end of the final settlement of the enterprise income tax of the year when they enjoy the preferential items.

　　Article 11 The tax authority should strictly follow these Measures to manage the preferential items. It's forbidden to alter the management way of preferential items.

　　Article 12 Enterprises enjoying preferential items are subject to follow-up management of the tax authority from time to time. In the follow-up management, enterprises should provide materials retained for review at the request of the tax authority within a specified time limit and in a specified way, to demonstrate their qualification for the preferential items. Among them, enterprises enjoying preferential items for IC manufacturers, IC design enterprises, software enterprises and key software enterprises and IC design enterprises within the national plan should submit materials required to the tax authority according to the list set out in the "follow-up management requirement" under the Catalogue, after the final annual settlement.

　　Article 13 Enterprises finding out that they are not qualified for the preferential items they've already enjoyed should timely make adjustments according to law and pay back the tax and overdue fine.

　　Article 14 Enterprises, enjoying preferential items but failing to provide materials retained for review at the request of the tax authority or providing materials not relevant to their actual production and operation, financial accounting, technical fields, industries, catalogues or qualification certificates, and unable to prove their qualification for the preferential items or found out involving cheating, would be investigated by the tax authority over their preferential enterprise income tax and resorted to treatments under the tax collection and administration laws.

　　Article 15 These Measures apply to the final settlement of enterprise income tax in 2017 and preferential items regard to enterprise income tax in years to come. The Announcement of the State Taxation Administration on Issuing the Procedures for Handling Preferential Policies on Enterprise Income Tax (Announcement No.76 of the State Taxation Administration, 2015) shall be abolished.