Income tax exemption [ 中文 ]

在华再投资利润免税新政策
Policy of Tax Exemption on Re-invested Profits of the Foreign Invested Enterprise in China

Effective on 1st Jan 2017

The tax exemption is subject to the following conditions being met:

1. re-investment fund should be directly paid to target companies;
2. re-investment projects should fall under the "encouraged category" in the Guidance List of Foreign Investment in Industries 外商投资产业指导目录;
3. the re-invested profits includes bonus issue, and retained profits of previous years;
4. re-investment can take the form of capitalization of retained profits 转入资本公积, capital contribution to newly set up entities in China, or acquiring domestically funded entities.
 

The joint notice of the Ministry of Finance, State Administration Taxation (SAT), State Development & Reform Commission (SDRC), and Ministry of Commerce provide that where the foreign investor takes back the re-invested profits by share transfer, share buy-back or the liquidation of foreign investment enterprises, the foreign investor shall declare to the tax authority the tax on previously tax-exempt dividend and bonus issue, within 7 days of receiving the money.

财政部、税务总局、国家发展改革委、商务部联合印发《关于境外投资者以分配利润直接投资暂不征收预提所得税政策问题的通知》。《通知》规定：境外投资者通过股权转让、回购、清算等处置方式实际收回享受暂不征收预提所得税待遇的股息、红利等权益性投资收益的，应在实际收取相应款项后7日内，向税务部门申报补缴税款。