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Clarification on Corporate Income Tax (CIT) incentives for Advanced Technology Service Enterprises (ATSE)

Clarification on Corporate Income Tax (CIT) incen...

China Tax Alert - Issue 30, December 2014   Recently, the Ministry of Finance (MOF), the State Administration of Taxation (SAT), the Ministry of Commerce (MOC), the Ministry of Science and Technology (MOST) and the National Development and Reform Commission (NDRC) jointly issued Circular 59: Notice Regarding Corporate Income Tax incentives for Advanced Technology Service Enterprises (ATSEs).  It extends the incentive expiration date, nullifies certain provisions for enterprises and lowers the minimum income percentage derived from offshore outsourcing services.  For enterprises which are located in 21 model cities, particularly those which did not apply for the tax incentives due to failure to satisfy the criteria on the percentage of offshore income, we advise them to conduct self-evaluation as soon as possible to determine whether they can meet the recognition criteria under Circular 59. Moreover, as the recognition criteria for High-New-Technology Enterprises may be tightened, service enterprises may wish to assess their own status and explore the most eligible tax incentives.

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