• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/16/2013

China - Software enterprises eligible for corporate income tax incentives 

August 16:  China’s State Administration of Taxation issued guidance to clarify the rules concerning software enterprises that are eligible for certain corporate income tax incentives.

Announcement No. 43 (25 July 2013) generally provides that software enterprises incorporated before 31 December 2010 but that have not been “assessed” may benefit from the corporate income tax incentive policies pursuant to Cai Shui [2008] No. 1, until the expiration of the incentive period.

Announcement No. 43 defines which software enterprises are eligible for the corporate income tax incentives; clarifies the “total revenue” requirement; defines what is meant by the “first profitable year” as well as how to calculate the tax incentive period; and the accumulation of R&D expenses.

The guidance also contains transitional rules.

Read an August 2013 report [PDF 521 KB] prepared by the KPMG member firm in China: Clarification of Corporate Income Tax incentives for software enterprises

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