New corporate income tax policy in corporate restructuring

The corporate income tax (CIT) treatment for corporate restructuring has become a hot topic ever since the income tax regimes for domestic enterprises (DE) and foreign-invested enterprises (FIE) were combined since January 1 2008. The Notice Regarding Several Questions about Corporate Income Tax Treatments for Corporate Restructuring (Cai Shui [2009] No. 59, Circular 59), issued by the Ministry of Finance (MOF) and State Administration of Taxation (SAT) on April 30 2009 and effective since January 1 2008, replaced the previous income tax regimes for DEs and FIEs.