Announcement on Issues Relevant to Expanding the Scope of Enterprises to Which the Measures for Administration of the Exemption, Setoff and Refund of Tax Apply

(Issued by the State Administration of Taxation on March 14 2011 and effective as of May 1 2011.)

SAT [2011] No.18

With a view to supporting the development of new industries in China and adapting to new business models, we hereby announce matters relevant to expanding the scope of enterprises to which the measures for administration of the exemption, setoff and refund of tax apply as follows:

1. Integrated circuit design, software design and animation design enterprises as well as other high and new technology enterprises (other than small taxpayers) that have had their business registration granted for at least two years and that engage in the following businesses may be governed by the measures for administration of the exemption, setoff and refund of tax:

(1) the export of goods the research and development or design of which was done by the enterprise itself and that were purchased by the enterprise after production and processing by another enterprise or were recovered by the enterprise after entrustment of their production and processing to another enterprise in China;

(2) the export of goods imported after entrustment of their processing to an offshore enterprise and on which the enterprise's brand is used;

(3) the export of goods concerning outsourced hardware and equipment in which software researched and developed or designed by the enterprise is embedded; or

(4) other circumstances as specified by the State Administration of Taxation.

2. This Announcement shall be effective as of May 1 2011. Where prior tax treatment is inconsistent with this Announcement, it may be adjusted in line with this Announcement.