Circular on Issues Relevant to the Refund of Enterprise Income Tax in Connection with Re-investments by Foreign Investors
国家税务总局关于外国投资者再投资退还企业所得税有关问题的通知
The Circular clarifies the refund of enterprise income tax in connection with re-investments by foreign investors of profits distributed after equity transfers.
(Issued by the State Administration of Taxation on, and effective as of, November 17 2005 .)
(国家税务总局于二零零五年十一月十七日发布施行。)
Guo Shui Han [2005] No.1093
国税函 [2005] 1093号
Offices of the State Administration of Taxation of provinces, autonomous regions, municipalities directly under the central government and cities with independent development plans and the Local Taxation Bureau of Shenzhen Municipality:
各省、自治区、直辖市和计划单列市国家税务局，深圳市地方税务局：
As reported, 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. We hereby notify you as follows on the issues of the handling of refunds of enterprise income tax in connection with re-investments by foreign investors of profits realized by enterprise before the acquisition of the equity by the foreign investors:
据反映，一些外商投资企业在其股权发生转让后，将属于股权转让前年度实现的利润分配给受让股权的外国投资者。现将外国投资者以受让股权前企业实现的利润再投资有关退还企业所得税的处理问题，通知如下：
1. If a foreign investor that acquires equity in a foreign-invested enterprise through a transfer and, after the equity transfer, re-invests in China the profits realized by the foreign-invested enterprise prior to the foreign investor's acquisition of the equity and distributed to it by the foreign-invested enterprise, such re-invested profit shall not be deemed profit directly used for re-investment for the purpose of Article 80 of the Implementing Rules for the PRC Foreign-invested Enterprise and Foreign Enterprise Income Tax Law and shall not be eligible for the tax refund incentive for the re-investment of profits.
一、 以受让方式取得外商投资企业股权的外国投资者，在受让股权后，以该外商投资企业分配的在其受让股权前实现的利润，在中国境内再投资的，该项再投资利润不属于《中华人民共和国外商投资企业和外国企业所得税法实施细则》第八十条规定的用于直接再投资的利润，不得享受有关利润再投资退税优惠。
2. If a foreign investor acquires equity from either of the affiliated persons set forth below with whom it directly or indirectly holds 100% of the equity or by whom 100% of the equity is held, if the equity from the affiliated transferor was acquired at cost and if the foreign investor, after the equity transfer, re-invests in China the profits realized by foreign-invested enterprise prior to the foreign investor's acquisition of the equity and distributed to it by the foreign-invested enterprise, such re-invested profit shall not be subject to the restriction in Article 1 and shall be eligible for the tax refund incentive for the re-investment of profits:
二、 外国投资者从与其有直接拥有或间接拥有或被同一人拥有100%股权关系的下列关联方受让股权，且按该关联转让方股权成本价成交的，该外国投资者在受让股权后，以该外商投资企业分配的在其受让股权前实现的利润，在中国境内再投资的，不受第一条规定限制，按有关规定享受利润再投资退税优惠。
(1) a foreign investor;
(一) 外国投资者；
(2) a foreign-invested enterprise specializing in investment business which, pursuant to the provisions of the Ministry of Finance and State Administration of Taxation, Circular on Several Taxation Issues Concerning Foreign-invested Enterprises Engaged in the Investment Business (ref. Cai Shui Zi [1994] No.083), may be deemed a foreign investor eligible for the tax refund incentive for re-investment.
(二) 按照《财政部、国家税务总局关于外商投资企业从事投资业务若干税收问题的通知》(财税字〔1994〕第083号)规定，可以视同外国投资者享受再投资退税优惠的专门从事投资业务的外商投资企业。
3. This Circular shall be effective as of the date of issue. No adjustments shall be made in accordance with this Circular for foreign investors who enjoyed the tax refund incentive for re-investment prior to this Circular.
clp reference:3210/05.11.17prc reference:国税函 [2005] 1093 号promulgated:2005-11-17effective:2005-11-17三、 本通知自发布之日起执行。此前已经享受再投资退税优惠的，不按本通知规定进行调整。
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