The new PRC Enterprise Income Tax Law (“EIT law”) came into effect on January 1, 2008 and consolidated the enterprise income tax regimes for domestic enterprises and foreign-invested enterprises and ended the system of dual income tax regimes. The new EIT law unified the tax rates and tax incentive policies for both domestic enterprises and foreign-invested enterprises so that more equitable market conditions are created.

 

For those enterprises previously enjoying favorable tax incentives under the former tax regimes, the new EIT law provides a 5-year transitional period. For example, enterprises that enjoyed fixed term tax exemptions and reductions may continue to enjoy them until the end of the original term. Enterprises that used to enjoy a 15% tax rate will gradually shift from the lower rate to the 25% as required by the new EIT law. The transitional tax incentive policies are provided in many different tax regulations. The following is an introduction of some of the transitional tax policies:
 

Stephen Nelson, head of King & Wood’s Taxation Practice & Wu Libin 

 

1. Transitional tax incentives to enterprises previously enjoying lower tax rates.

As of January 1, 2008, enterprises which enjoyed lower tax rates will be gradually transition to the new tax rate within 5 years after the implementation of the EIT law. Among them, the enterprises which previously enjoyed enterprise income tax rates of 15% shall be transition to tax rate of 18% in 2008, 20% in 2009, 22% in 2010, 24% in 2011 and 25% in 2012. Enterprises which enjoyed the tax rate of 24% previously shall be subject to the tax rate of 25% immediately in 2008.

 

 

2. Transitional tax incentives to enterprises previously enjoying fixed term tax exemptions and reductions.

 

As of January 1, 2008, enterprises which previously enjoyed fixed term enterprise income tax reductions or exemptions may continue to enjoy the same rate for the stated fixed pre-implementation term after the new EIT law takes affect. However, if an enterprise has not yet started to enjoy its period of exemption and reduction because of its failure to make profits to date, its period of exemption and reduction begins in 2008, whether or not it has a cumulative profit.
These transitional policies apply to foreign invested enterprises which were incorporated and registered before March 16, 2007.

 

If a foreign-invested enterprise enjoyed a fixed term tax exemption and reduction, but changes its business scope after 2008 and as a result, no longer satisfies the conditions as prescribed in previous tax laws and regulations to qualify for the tax holiday, it will then be required to repay the exempted and reduced taxes (including during the transitional period) based on the previous law.

 

3. Transitional tax incentives to enterprises previously enjoying low tax rates as well as fixed term tax exemptions and reductions

 

All enterprises that qualified for the enterprise income tax rate of 15% and simultaneously enjoy a 50% reduction for a fixed term may continue to enjoy this arrangement as follows: 50% reduction of 18% for the year 2008 (for a rate of 9%); 10% for the year 2009; 12% for the year 2011 and 12.5% in 2012 .

 

All enterprises that were previously under enterprise income tax rates of 24% or 33% but enjoying a 50% deduction for a fixed term may pay income tax based on a 50% deduction of the new tax rate of 25% tax rate in and after 2008.

 

4． Transitional tax incentives to High and New Technology Enterprises (“HNTEs”) established in special economic zones or in the Shanghai Pudong New Development Zone.

 

All HNTEs which are specially supported by the government, incorporated and registered on and after January 1, 2008 within the special economic zones or in Shanghai Pudong New Development Zone, will enjoy a two year tax exemption for the first two years, and a 50% deduction of the statutory tax rate of 25% for the third to fifth year, calculated from the financial year when the enterprise starts making its first business income within the special economic zone and Shanghai Pudong New Development Zone.

 

5. Tax incentives for Development in Western China

 

The special income tax policies for enterprises engaging in Western China development as provided in the “Notice on the Tax Favorable Policies for Western Development” will continue in force after the implementation of EIT.

 

 

企业所得税过渡期税收优惠概述

随着内外资企业所得税的统一，新的企业所得税法开始自2008年1月1日起正式生效，原来分别适用于内资企业和外商投资企业的所得税制同时废止。新的企业所得税法使原来的内外资企业在适用税率、优惠政策等方面实现了统一，为内外资企业创造了更加公平的市场环境。为使依原税制享受优惠的内外资企业在新企业所得税法实施后平稳过渡，如将未享受完的定期减免优惠享受完毕，使原适用15%低税率的企业逐步过渡到新企业所得税法规定的25%的税率等，税法对此设置了一个五年的过渡期。这些过渡期优惠政策散见于不同的法律规定之中，下面介绍的是一些已发布的过渡期税收优惠政策。

1、 原适用低税率企业的过渡期税收优惠

自2008年1月1日起，原适用低税率优惠政策的企业，在新税法施行后5年内逐步过渡到法定税率。其中：适用企业所得15%税率的企业，2008年按18%税率执行，2009年按20%税率执行，2010年按22%税率执行，2011年按24%税率执行，2012年按25%税率执行；原执行24%税率的企业，2008年起按25%税率执行。

2、 原享受定期减免优惠的过渡期税收政策

自2008年1月1日起，原享受企业所得税定期减免税优惠的企业，新税法施行后继续按原优惠办法及年限享受至期满为止，但因未获利而尚未享受税收优惠的，其定期减免期限从2008年度起计算。

享受上述优惠的外商投资企业，指在2007年3月16日之前完成登记注册的企业。

享受定期减免税的外商投资企业在2008年后其生产经营业务性质发生变化，导致其不符合原来法律规定的条件的，仍应按照旧法规定补缴其此前（包括在过渡期内）已经享受的定期减免税税款。

3、 原适用低税率并享受定期减免的企业过渡期税收政策

对按照国发[2007]39号文件有关规定适用15％企业所得税率并享受企业所得税定期减半优惠过渡的企业， 2008年按18％税率计算的应纳税额实行减半征税，2009年按20％税率计算的应纳税额实行减半征税，2010年按22％税率计算的应纳税额实行减半征税，2011年按24％税率计算的应纳税额实行减半征税，2012年及以后年度按25％税率计算的应纳税额实行减半征税。

对原适用24％或33％企业所得税率并享受国发[2007]39号文件规定企业所得税定期减半优惠过渡的企业，2008年及以后年度一律按25％税率计算的应纳税额实行减半征税

4、 经济特区和上海浦东新区新设立高新技术企业过渡期税收优惠

对经济特区和上海浦东新区内在2008年1月1日（含）之后完成登记注册的国家需要重点扶持的高新技术企业，在经济特区和上海浦东新区内取得的所得，自取得第一笔生产经营收入所属纳税年度起，第一年至第二年免征企业所得税，第三年至第五年按照25%的法定税率减半征收企业所得税

5、 西部大开发税收优惠政策

《关于西部大开发税收优惠政策问题的通知》中规定的西部大开发企业所得税优惠政策在新税法实施后继续有效