Western Development Enterprises Decrease Tax Rate by 15% and Collect Corporate Income Tax
The State Administration of Taxation issued the “Announcement on Deeply Implementing the Issues Concerning Corporate Income Tax on the Western Development Strategy†on April 26, to carry out the scope, review methods, application procedures, and calculation methods of the total branches of the relevant western development that can enjoy the preferential corporate income tax. clear. The “Circular on the Implementation of the Western Development Strategy concerning Taxation Policies†issued by the Ministry of Finance earlier stipulated that, for enterprises with encouraged industries located in the western regions, their encouraged main business income accounts for more than 70% of total corporate income. , reduce corporate income tax at a tax rate of 15%. The "Announcement" stated that since the new "Catalogue of Encouraged Industries in the Western Region" has not yet been promulgated, enterprises can still follow the 2005 and 2011 editions of the "Guidance Catalogue for Industrial Structure Adjustment" and the 2007 version of "Foreign Investment" before the introduction of the new catalog. The Industrial Guidance Catalogue and the 2008 edition of the Catalogue of Advantageous Industries in the Central and Western Regions determine the scope of preferential industries and resubmit the application after the new catalog is published. As for the general branch offices belonging to different regions, the "Announcement" clearly stipulates that only the 15% concessionary principle shall apply to the income of branch offices in the western region. In addition, for the five western companies that have previously enjoyed “two exemptions and three reductions†in transportation, electricity, water conservancy, postal services, and radio and television, the “Proclamation†stipulates that the concessions will no longer be updated upon expiration.
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