28.07.10 23:46 Age: 9 yrs
Operating Guidance for Tax Credit of Overseas Corporate Income Tax announced
On July 2nd, 2010, the State Administration of Taxation released the “Announcement on Distributing the ‘Operating Guidance for Tax Credit of Overseas Corporate Income Tax’” (Announcement  No.1 of the State Administration of Taxation)
This is guidance on how to operate the specific rules about overseas corporate income tax in the Corporate Income Tax Law of the PRC, the Regulation on the Implementation of the Corporate Income Tax Law of the PRC, the Notice of the Ministry of Finance and the State Administration of Taxation on Tax Credit of Overseas Corporate Income Tax. This guidance has been in effect since July 1st, 2010. It is also notified that those untreated overseas taxation can also be operated according to the guidance provided.
In the short guidance, 16 items are listed, including specific rules about the scope of application, basic items, calculation and verification of the amount of overseas income tax that can be credited, as well as the calculation of indirectly borne tax, calculation of the shareholding proportion of foreign enterprises, verification of tax payable as tax sparing credit, etc.
“This Guidance announced recently has more specific rules on the Overseas Corporate Income Tax, avoids double-taxation, and will surely bring great benefit to the Oversea Corporations in China. It shows a more open China and a more active government.” said Bexcel Chen, a tax advisor in Lehman, Lee & Xu.
As a prominent Chinese corporate law firm and trademark and patent agency, Lehman, Lee & Xu has always maintained a focus on the tax law of China. The firm has also been recognized as one of the top full service and intellectual property firms in China by several international magazines. It now has offices in Beijing, Shanghai, Shenzhen, Hong Kong, Macau, and Mongolia. The firm is managed by Mr. Edward Lehman, a leading expert on corporate law with over twenty years of practice experience in Mainland China.
To learn more about us, please visit our website at www.lehmanlaw.com.