• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 6/18/2013

China - Tax incentives for outsourcing service sector 

June 18: Under guidance issued by China’s Office of the State Council, tax incentives are extended for the outsourcing service sector until 31 December 2018

This opportunity provides existing advanced technology service enterprises an opportunity to assess whether they continue to qualify for the tax incentives and to act accordingly.

Business tax exemption on qualified outsourcing service income can help companies in the outsourcing service pilot cities to obtain certainty regarding a value added tax (VAT) exemption on qualified offshore outsourcing service income up to 31 December 2013.

Furthermore, in conjunction with the VAT pilot program, a future reduction of the offshore outsourcing income threshold for advanced technology service enterprise qualification to 35% may encourage more multinational companies to set up outsourcing service companies in China—such as internal shared-service centres.

Read a June 2013 report [PDF 335 KB] prepared by the KPMG member firm in China: China extends tax incentives for outsourcing service sector

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