The State Administration of Taxation (SAT) issued an announcement on March 10, 2015, (Notice 14) on enterprise income tax issues following from the Encouraged Foreign Investment Project Catalog for Central and Western China (Central & Western Catalog), as supplemented by the Catalog of Encouraged Industries in the Western Region, released by the National Development and Reform Commission and effective from October 1, 2014 (Western Encouraged Catalog). Notice 14 applies retroactively from October 1, 2014. It clarifies that the reduced corporate income tax rate is available to enterprises in the western regions if their main business is newly added as an encouraged business in the Western Encouraged Catalog and accounts for more than 70% of their revenue. An enterprise that formerly enjoyed the preferential rate but is no longer in an encouraged category will cease to enjoy such rate.
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