State Administration of Taxation, Circular on Issues Relevant to the Refund of Enterprise Income Tax in Connection with Re-investments by Foreign Investors

Issued: November 17 2005
Effective: as of date of issue

Main contents: After the occurrence of a transfer of their equity, certain foreign-invested enterprises have distributed profits, which were realized in years prior to the equity transfer, to the foreign investor that acquired the equity. The Circular clarifies the refund of enterprise income tax in connection with re-investments by foreign investors of such profits.
Related legislation: Implementing Rules for the PRC Foreign-invested Enterprise and Foreign Enterprise Income Tax Law, Jun 30 1991, CLP 1991 No.7 p.16 and Circular on Several Taxation Issues Concerning Foreign-Invested Enterprises Engaged in the Investment Business, 1994