State Administration of Taxation, Announcement on Several Issues Concerning the Administration of Income Tax of Non-tax-resident Enterprises

Issued: February 28 2011
Effective: April 1 2011

Main contents: The Announcement clarifies six income tax issues of non-tax-resident enterprises:

(1) issue of withholding enterprise income tax on payable but unpaid income;

(2) issue of the tax treatment of charges paid for the provision of security;

(3) issue of levy of tax on income derived from the assignment of land use rights;

(4) issue of the tax treatment of rent income derived from lease financing or from the lease of immovable property;

(5) issue of the handling of the withholding of enterprise income tax on equity investment returns such as dividends and bonuses; and

(6) issues relevant to the implementation of the Circular on Strengthening the Administration of Enterprise Income Tax on Income Derived from the Transfer of Equity of Non-tax-resident Enterprises.

Related legislation: PRC Enterprise Income Tax Law, Mar 16 2007, CLP 2007 No.3 p.21; and Circular on Strengthening the Administration of Enterprise Income Tax on Income Derived from the Transfer of Equity of Non-tax-resident Enterprises, Dec 10 2009, CLP 2010 No.1 p.61