Ministry of Finance and State Administration of Taxation, Circular on the Examination and Approval Procedures Relevant to the Implementation of Income Tax Policies on Software and Integrated Circuit Enterprises by Foreign-invested Enterprises

Issued: July 1 2005

Main contents: The provisions that "foreign-invested enterprises with an investment amount of US$30 million or above applying to the State Administration of Taxation for approval and foreign-invested enterprises with an investment amount of less than US$30 million subject to the approval of the competent tax authority" of Article 1(6) and Article 2(2) of the Circular on Tax Collection Policy Issues Relevant to Encouraging the Development of the Software and Integrated Circuit Industries (Cai Shui [2000] No.25) shall no longer be implemented. When filing for income tax, enterprises may determine on their own the limit of the years of depreciation or amortization of software or production equipment purchased in accordance with provisions, but once decided such limit may not be subject to arbitrary changes. Enterprises are subject to the checking by tax authorities concerning their eligibility in applying Article 1(6) and Article 2(2) of document Cai Shui [2000] No.25.
Related legislation: PRC Administrative Licensing Law, Aug 27 2003, CLP 2003 No.7 p.7; Circular on Tax Collection Policy Issues Relevant to Encouraging the Development of the Software and Integrated Circuit Industries, 2000 and PRC Administration of Tax Collection Law (Revised in April 2001), Apr 28 2001, CLP 2001 No.5 p.12 & CLP 1995 No.3 p.12