A detailed explanation of the new pattern of enterprise income tax

At the end of December 2007, the Chinese State Council issued a notice to the United < People's Republic of China Enterprise Income Tax Law > (hereinafter referred to as the new tax) as the basis, will gradually abolish about 30 of the historical formation of the Enterprise income tax regional preferential policies.　　Notice at the same time clear, continue to implement the existing tax incentives for the development of the West, Shenzhen, Zhuhai, Shantou, Xiamen, Hainan Special Economic Zone and Shanghai Pudong New area will be two free of three to halve the transition preferential policy. This means that the new pattern of corporate income tax concessions is basically clear.　　The new tax policy framework, supplemented by industrial preferences and regional preferences, has taken a solid step. Some tax experts believe that the steady advance of tax rates is conducive to the gradual acceptance of new policies, but the granting of new "privileges" in some areas may lead to new rent-seeking space.　　But overall, the new SAR and the Pudong New area and other enterprises to obtain more privileges than before, greatly reduced. Detailed discount < The State Council's notice on the implementation of the preferential policy for the transition of enterprise Income tax > Guo (2007)39 (hereinafter referred to as < interim preferential Policy Notice >) stipulates that, since January 1, 2008, the original enjoy low tax preferential policies of enterprises,　　A gradual transition to a statutory tax rate within 5 years of the implementation of the new tax law. The transition will be smooth: enterprises with a 15% tax rate for corporate income tax, implemented in 2008 at 18% tax rate, implemented in 2009 at 20% tax rate, implemented in 2010 at 22%, 2011 at 24% rate, and 2012 at 25% rate;　　will be implemented at 25% tax rate since 2008. At the same time, from January 1 this year, the original enjoyment of enterprise income tax "two free from three halved", "five free of five to halve" and other periodic tax concessions for enterprises, the new tax law will continue to be in accordance with the original tax laws, administrative regulations and relevant documents stipulated in the preferential measures and the expiration date, but because of no profit and has not yet enjoyed tax concessions,　　Its terms of offer are calculated from 2008 onwards.　　In accordance with the provisions of the above transitional preferential policies of enterprises, refers to the March 16, 2007 by the Industry and commerce and other registration authorities registered to set up enterprises.　　These enterprises "to implement the project and scope of the transitional preferential policy, will be in accordance with the notification of the < implementation of the enterprise Income Tax Transitional preferential policy table > implementation."　　This "policy statement" has a total of 30 major items, covering the new tax law before the release of the state-approved enterprises in accordance with the original tax laws, administrative regulations and the effect of the provisions of the administrative rules and regulations enjoyed a large number of corporate income tax preferential policies.　　< interim preferential policy notice > at the same time, the enterprises enjoying the preferential policy of enterprise income tax should calculate the taxable income according to the provisions of the new tax law and the regulations concerning income and deduction, and enjoy the tax preference according to the first part of this notice. Enterprise Income tax transition preferential policy and the new tax law and the implementation of the preferential policies stipulated in the cross, by the enterprise to choose the most preferential policy implementation, not overlappingPlus enjoyment, and once selected, shall not be changed. "Transitional policies will allow the once-skewed rules of the game to return to fairness and fairness, while safeguarding the smooth transition of the old and new tax laws."　　Professor Liu Jianwen, director of Finance and Taxation Law Research Center, Peking University. Wu Jiayuan, head of the tax and business advisory service in North China, Deloitte, said that such a gradual adjustment from the existing tax rate to a phased approach would reduce the impact of the merger of the two laws on foreign companies.　　Wu Jiayuan said that the introduction of the policy means that some special concessions in the past, tax reform will probably be universally applicable nationwide, from regional development to industry-oriented, is a relatively important change.　　Zhang Mizheng, chief expert of China's registered tax planner, said that since 1994, regional concessions have basically reached the policy effect, at this stage, the conservation of tax sources should be more reflected in strengthening the development of enterprises to promote the development of micro-economic subjects, and regional preferential policy is difficult to direct enterprises to benefit from tax concessions. The new "privilege" of the "wing area" however, the phasing out of the old regional preferential policies does not seem to imply that the regional concessions themselves have been negated.　　Under the concept of "industry preference and regional preference supplement", the two notices of the State Council also endow China with "two wings" new "privileges".　　< interim preferential policy notice > clearly pointed out that the Ministry of Finance, the general administration of taxation and the Customs and Excise Department of < on the Western development of preferential tax policy issues > (Tax (2001)202 Number) stipulated in the Western Development enterprise Income tax preferential policies continue to implement. As a matter of fact, this policy has been tilted as early as 2007 years.　　June 14, Zhongqing deputy Mayor Huang in an interview with foreign media, said, "after the merger of two taxes," at least 10 years, the Chongqing foreign company tax rate remains 15%. Huang's comments have been widely debated because, according to the < circular of the State Council on the implementation of several policy measures for the development of the Western Region > (2000]33), for domestic and foreign-funded enterprises located in the western regions of China, in the period from 2001 to 2010, Income tax is levied at a rate of 15% per cent.　　[Page] At the end of December 2007, the Chinese State Council issued a notice to the United < People's Republic of China Enterprise Income Tax Law > (hereinafter referred to as the new tax) as the basis, will gradually abolish about 30 of the historical formation of the Enterprise income tax regional preferential policies.　　Notice at the same time clear, continue to implement the existing tax incentives for the development of the West, Shenzhen, Zhuhai, Shantou, Xiamen, Hainan Special Economic Zone and Shanghai Pudong New area will be two free of three to halve the transition preferential policy. This means that the new pattern of corporate income tax concessions is basically clear.　　The new tax policy framework, supplemented by industrial preferences and regional preferences, has taken a solid step. Some tax experts believe that the steady advance of tax rate is conducive to enterpriseGradually accept the new policy, but giving some areas new "privileges" may lead to new rent-seeking space.　　But overall, the new SAR and the Pudong New area and other enterprises to obtain more privileges than before, greatly reduced. Detailed discount < The State Council's notice on the implementation of the preferential policy for the transition of enterprise Income tax > Guo (2007)39 (hereinafter referred to as < interim preferential Policy Notice >) stipulates that, since January 1, 2008, the original enjoy low tax preferential policies of enterprises,　　A gradual transition to a statutory tax rate within 5 years of the implementation of the new tax law. The transition will be smooth: enterprises with a 15% tax rate for corporate income tax, implemented in 2008 at 18% tax rate, implemented in 2009 at 20% tax rate, implemented in 2010 at 22%, 2011 at 24% rate, and 2012 at 25% rate;　　will be implemented at 25% tax rate since 2008. At the same time, from January 1 this year, the original enjoyment of enterprise income tax "two free from three halved", "five free of five to halve" and other periodic tax concessions for enterprises, the new tax law will continue to be in accordance with the original tax laws, administrative regulations and relevant documents stipulated in the preferential measures and the expiration date, but because of no profit and has not yet enjoyed tax concessions,　　Its terms of offer are calculated from 2008 onwards.　　In accordance with the provisions of the above transitional preferential policies of enterprises, refers to the March 16, 2007 by the Industry and commerce and other registration authorities registered to set up enterprises.　　These enterprises "to implement the project and scope of the transitional preferential policy, will be in accordance with the notification of the < implementation of the enterprise Income Tax Transitional preferential policy table > implementation."　　This "policy statement" has a total of 30 major items, covering the new tax law before the release of the state-approved enterprises in accordance with the original tax laws, administrative regulations and the effect of the provisions of the administrative rules and regulations enjoyed a large number of corporate income tax preferential policies.　　< interim preferential policy notice > at the same time, the enterprises enjoying the preferential policy of enterprise income tax should calculate the taxable income according to the provisions of the new tax law and the regulations concerning income and deduction, and enjoy the tax preference according to the first part of this notice.　　Enterprise Income tax transition preferential policy and the new tax law and the implementation of the preferential policies stipulated in the cross, by the enterprise to choose the most preferential policy implementation, not superimposed enjoyment, and once selected, must not be changed. "Transitional policies will allow the once-skewed rules of the game to return to fairness and fairness, while safeguarding the smooth transition of the old and new tax laws."　　Professor Liu Jianwen, director of Finance and Taxation Law Research Center, Peking University. Wu Jiayuan, head of the tax and business advisory service in North China, Deloitte, said that such a gradual adjustment from the existing tax rate to a phased approach would reduce the impact of the merger of the two laws on foreign companies.　　Wu Jiayuan said that the introduction of the policy means that some special concessions in the past, tax reform will probably be universally applicable nationwide, from regional development to industry-oriented, is a relatively important change. China noteZhang Mizheng, chief expert of the book Tax Planner Project, believes that the regional concessions since 1994 have basically reached the policy effect, at this stage, the conservation of tax source to be more reflected in the strengthening of the enterprise development stamina, the development of micro-economic subjects, and regional preferential policy is difficult to direct enterprises from the tax benefits. The new "privilege" of the "wing area" however, the phasing out of the old regional preferential policies does not seem to imply that the regional concessions themselves have been negated.　　Under the concept of "industry preference and regional preference supplement", the two notices of the State Council also endow China with "two wings" new "privileges".　　< interim preferential policy notice > clearly pointed out that the Ministry of Finance, the general administration of taxation and the Customs and Excise Department of < on the Western development of preferential tax policy issues > (Tax (2001)202 Number) stipulated in the Western Development enterprise Income tax preferential policies continue to implement. As a matter of fact, this policy has been tilted as early as 2007 years.　　June 14, Zhongqing deputy Mayor Huang in an interview with foreign media, said, "after the merger of two taxes," at least 10 years, the Chongqing foreign company tax rate remains 15%. Huang's comments have been widely debated because, according to the < circular of the State Council on the implementation of several policy measures for the development of the Western Region > (2000]33), for domestic and foreign-funded enterprises located in the western regions of China, in the period from 2001 to 2010, Income tax is levied at a rate of 15% per cent. [Page] At the same time, according to this new regulation, in the western region of the newly-run traffic, electricity, water conservancy, postal, radio and television enterprises, the above project business income accounted for more than 70% of the total income of enterprises, but also can continue to enjoy the enterprise income tax as follows preferential policies: domestic　　The first year to the second year is exempt from the enterprise income tax, the third year to the fifth year to halve the enterprise income tax, the foreign investment enterprise business period is above 10 years, from the profit year onwards, the first year to the second year is exempt the enterprise income tax, the third year to the fifth year the Enterprise income　　In this regard, the Ministry of Finance explained that this is to actively guide the direction of investment in the western region, to promote the western region's economic total, to support the accelerated development of the western region and promote the coordinated development of regional economic and social.　　According to the State Council notice issued on the same day, the other wing of China-located in the east of China's Shenzhen, Zhuhai, Shantou, Xiamen, Hainan Special Economic Zone and Shanghai Pudong New Area-its newly established High-tech Enterprises will be the new two-and-three-to halve the transition preferential policy. The above notice stipulates that for the five special economic zones and the Shanghai Pudong New Area January 1, 2008 (including) after the completion of registration of the countries need to focus on supporting High-tech Enterprises (hereinafter referred to as newly established High-tech Enterprises), in the Special Economic Zone and Shanghai Pudong District, the income obtained, From the first year to the second year from the tax year of the first production operation income, the enterprise shall be exemptedIncome tax, the third year to the fifth year, according to 25% of the statutory tax rate halved levy enterprise income tax.　　The new rules of the old preferential policy can be found that the five special economic zones and Shanghai Pudong New area has been the newly acquired "privileges" has obviously been greatly reduced.　　In the old income tax regional concessions, foreign-funded enterprises located in special economic zones, enterprises set up in special economic zones, enterprises engaged in production and operation, and productive foreign-invested enterprises based in economic and technological development zones shall levy enterprise income tax at a rate of 15%.　　And the new provisions of the above special Zone and Pudong district of preferential scope in the "National need for key support of High-tech enterprises."　　The state needs to focus on the support of High-tech Enterprises, refers to the core of independent intellectual property rights, at the same time the < PRC Enterprise Income Tax Law implementation of the provisions of the Regulations > 93rd, and in accordance with < High-tech enterprises to determine the management method > recognized High-tech enterprises. At the same time, the notice of High-tech enterprises to identify more stringent than before.　　No longer has the qualification of High-tech Enterprises due to a review or spot check, from which they no longer have the qualification of High-tech Enterprises, cease to enjoy transitional tax concessions, and shall not continue to enjoy or renew the transitional tax concession after being identified as a High-tech enterprise again.　　However, the relevant provisions of the new rules also led to some controversy. "The largest feature of the merger of the two laws is the realization of a uniform standard of taxation, and will the new regional concessions make it difficult to implement the unified policy?"　　Some tax experts expressed concern about this. In accordance with the preferential provisions of the State Council, special Economic Zones and newly established High-tech Enterprises in Shanghai Pudong New area engaged in production and operation in areas other than the Special economic Zone and Shanghai Pudong District shall separately calculate the income obtained in the Special Economic Zone and Shanghai Pudong area, and reasonably apportion the period expenses of the enterprise　　shall not enjoy corporate income tax concessions.　　The same concerns are shared by those who will leave room for business operations and tax enforcement. At the same time, regional concessions this bowl of water seems hard to leveled.　　Some people pointed out that the same is the SAR, the new district, Tianjin Binhai New area and other areas are not ranked among them? "We have also been to the country to give Pudong the preferential treatment, now see No."　　Tianjin Binhai New Area management committee related Personage said. The personage introduced to the reporter, Binhai New area in the country strives for the enterprise Income Tax transition period preferential policy, the last word is, "wants to give us with Pudong, Shenzhen equal policy." "The original application of Binhai New area seems to be justified.　　The people pointed out that the Binhai New area and Pudong, Shenzhen has been given the same historical tasks, and Binhai New area was later incorporated into the National development strategy, and Pudong, Shenzhen has the advantage of the first. Although the Binhai New area has some good foundation and the condition, but compared to them still has the very big disparity, needs the country to give the support, in particular, all three are the Eastern open areas, the policy development needs a fair competition environment. "The personSaid。 But at the same time, the person also expressed full understanding and respect for the introduction of the national policy, "the state must be considered, we hope to get this preferential, but the future development of Binhai New area and the full play of the radiation effect, the key is to rely on ourselves, relying on independent innovation."　　"and the Ministry of Finance said that the reason for the choice of the five special economic zones and Shanghai Pudong New area, is to" continue to play special economic Zone and Shanghai Pudong New area, to reflect our country continue to adhere to the basic policy of reform and opening-up. " (This reporter Chen Mo also contributed to this article)