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	REPLY OF THE STATE ADMINISTRATION OF TAXATION CONCERNING THE CORPORATION INCOME TAX PREFERENTIAL TREATMENTS FOR TECHNOLOGICALLY ADVANCED ENTERPRISES ENJOYED BY FOREIGN-FUNDED ENTERPRISES WITH PHASED INVESTMENT AND OPERATION

	(Letter No.837 [2003] of the State Administration of Taxation July 9, 2003)


SUBJECT : CORPORATE TAX; PREFERENTIAL TREATMENT; TECHNOLOGICALLY ADVANCED; FOREIGN-FUNDED
ISSUING DEPARTMENT : STATE ADMINISTRATION OF TAXATION
ISSUE DATE : 07/09/2003
IMPLEMENT DATE : 07/09/2003
LENGTH : 314 words
TEXT :

Regarding Request for Instructions on the Income Tax Preferential Policies Respectively Enjoyed by Foreign-Funded Enterprises with Phased Investment and Operation (No.99 [2003] of the Administration of State Taxes of Ningbo Municipality) from your Administration has been received. With respect to the issue that where a project constructed and put into operation on a phased basis by a foreign-funded enterprise, which meets the conditions provided for in Article 2 of the Circular of the State Administration of Taxation under the Ministry of Finance Concerning Several Provisions on the Collection of Income Tax from Chinese-Foreign Equity Joint, Contractual Joint, and Solely Foreign-Funded Enterprises (No.102 [86] of the State Administration of Taxation), enjoys the tax reduction and exemption provided for in Article 8 of the Law of the People's Republic of China on the Income Tax of Foreign-Funded Enterprises and Foreign Enterprises (hereinafter referred to Taxation Law), if that enterprise is also determined as a technologically advanced enterprise by the relevant department, whether it may enjoy, on a separate calculation basis, the tax preferential policies provided for in Paragraph 8 of Article 75 of the Implementation Rules for the Taxation Law, we make the following reply upon deliberation:

In accordance with the principles provided for in Document No.102 [86] of the State Administration of Taxation, where a foreign-funded enterprise constructs and puts into operation a project on a phased basis in accordance with the investment amount set forth in the approved initial contract, and the proceeds it derives from the project constructed and operated on a phased basis are entitled to the regular tax reduction and exemption provided for in Article 8 of the Taxation Law, if that enterprise is still determined as a technologically advanced enterprise by the relevant department, it may continue to enjoy the respective tax preferential treatments provided for in Paragraph (8) of Article 75 of the Implementation Rules for the Taxation Law.