China alert - Issue 11, April 2011
In Announcement 24, the State Administration of Taxation (SAT) clarifies the timing and calculation method of the Corporate Income Tax (CIT) treatment of loan interest, rentals, royalties, capital gains and guarantee fees derived by non-resident enterprises from China. Many of the rules contained in Announcement 24 are similar to those on the same issues under the old Foreign Enterprise Income Tax (FEIT) Law. With the issuance of Announcement 24, the new CIT Law has "caught up" with the old FEIT Law in the sense that many issues that used to be addressed by the old law, but not the new law have now been dealt with by Announcement 24. Announcement 24 is effective from 1 April 2011.