Announcement on Issues Relevant to the Levy of Enterprise Income Tax by Assessment

(Issued by the State Administration of Taxation on June 19 2012 and effective as of January 1 2012.)

SAT Announcement [2012] No.27

Pursuant to relevant provisions of the PRC Enterprise Income Tax Law and its Implementing Regulations, the State Administration of Taxation, Circular on the Issuance of the (Trial Implementation) (Guo Shui Fa [2008] No.30) and the State Administration of Taxation, Circular on Several Issues Concerning the Levy of Enterprise Income Tax by Assessment (Guo Shui Han [2009] No.377), we hereby make the following announcement on several issues concerning the levy of enterprise income tax by assessment:

1. Enterprise income tax may not be levied by assessment against enterprises that solely engage in equity (stock) investment business.

2. All of the income derived from the transfer of property, such as the transfer of equity (stocks), by an enterprise against which enterprise income tax is levied by assessment by the assessed taxable income rate method in accordance with the law shall be counted as part of its taxable income, and tax shall be calculated and levied thereon at the applicable taxable income rate determined for the main project (business) in which it engages. In the event of a change in the main project (business) in which it engages, the applicable taxable income rate shall be determined anew at the time of final settlement of the year based on the main project (business) after the change and tax shall be calculated and levied on such basis.

3. This Announcement shall be effective as of January 1 2012. An enterprise's items as mentioned above from previous years that have not yet been treated shall be treated in accordance with the provisions hereof. Those that have already been treated shall not be adjusted.