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In order to further strengthen the collection management of business taxes on educational labor services, we herby specify the relevant issues in the Notice of the Ministry of Finance and the State Administration of Taxation on Education Tax Policies (No.39 [2004] of the Ministry of Finance) as follows: I. ISSUE ABOUT "BUSINESS TAX SHALL BE EXEMPTED FROM THE INCOMES GAINED FROM EDUCATIONAL LABOR SERVICES PROVIDED BY THE SCHOOLS THAT ENGAGE IN THE EDUCATION FOR ACADEMIC CREDENTIALS" (1) The "education for academic credentials" refers to such a teaching form whereby the educatees enter into the schools as approved by the relevant department of the state or other educational institutions after passing the national education examination or by any other admission method as prescribed by the state and obtain the academic credentials as recognized by the state; and specifically includes: 1. Primary education: regular primary schools and adult primary schools 2. Junior secondary school education: regular junior secondary schools, vocational junior secondary schools and adult junior secondary schools; 3. Senior secondary school education: regular senior secondary schools, adult senior secondary schools and vocational senior secondary schools (including regular technical secondary schools, adult technical secondary schools, vocational senior secondary schools and skilled worker schools); and 4. Higher education: regular colleges and universities, adult colleges and universities, internet colleges and universities, institutions for graduate degrees (doctorial degrees and master degrees), self-taught higher education examinations as well as examinations of higher education of academic credentials. (2) The "schools that engage in the education for academic credentials" refers to the regular schools and other kinds of schools that are established upon the approval of the people's governments at or above the level of prefecture or city or the educational administrative departments under the governments at the same level, and the academic credentials of the students in such schools are recognized by the state. The aforesaid schools include the private schools engaging in the education for academic credentials according to the provisions, but exclude the professional training institutions and other educational institutions, the academic credentials of the students in such schools are not recognized by the state. (3) The business tax shall be exempted from the incomes gained from educational labor services according to the following provisions: The "incomes gained from educational labor services" refers to the incomes from providing the services of the education for academic credentials to the student enrollment within the prescribed admission plans, and specifically includes the incomes from tuitions, housing fees, textbook fees, exercise-book fees, boarding fees and fees for entering for examinations that are examined and approved by the relevant administrative department and are collected according to the prescribed rates. The fees collected by exceeding the prescribed charging rates or the sponsorship fees and school selection fees collected in any name and by exceeding the prescribed scope are not the incomes gained from educational labor services that are free of the business tax, and shall be taxed according to the provisions. II. ISSUE ABOUT THE "BUSINESS TAX SHALL BE EXEMPTED FROM THE INCOME GAINED FROM PROVIDING NURSING SERVICES BY NURSERIES OR KINDERGARTENS" (1) The "nurseries or kindergartens" refers to the institutions for preschool education of kids between 0-6 years old that are established upon approval of the education administrative department at or above the county level and have obtained licenses for running nurseries or kindergartens, including public and private nurseries, kindergartens, preschools, nursery classes, child care schools and nursery schools; (2) The "providing of nursing services" refers to the nursing and teaching services provided by the aforesaid nurseries or kindergartens to the students; (3) The "incomes gained from providing nursing services by public nurseries or kindergartens that are exempted from the business tax" refers to the teaching and nursing fees collected according to the charging rates as examined by the provincial fiscal administrative department and the provincial price administrative department and approved by the provincial people's government; (4) The "incomes gained from providing nursing services by private nurseries or kindergartens that are exempted from the business tax" refers to the teaching and nursing fess collected according to the charging rates as put on records and publicized by the local relevant administrative department; and (5) The incomes from the fees collected by exceeding the prescribed charging rates, the fees additionally collected from holding experimental classes, specialty training classes and hobby lessons as well as the sponsorship funds and educational support fees are not the incomes gained from providing nursing services that are free of the business tax. III. ISSUE ABOUT "BUSINESS TAX SHALL BE EXEMPTED FROM THE INCOMES GAINED FROM HOLDING CLASSES FOR ADVANCED STUDY OR TRAINING CLASSES BY COLLEGES AND UNIVERSITIES, SECONDARY SCHOOLS AND ELEMENTARY SCHOOLS (EXCLUDING THEIR SUBORDINATE ENTITIES) AS FUNDED BY GOVERNMENTS ON CONDITION THAT ALL THE INCOMES SHALL BE OWNED BY THE SCHOOLS" (1) The "colleges and universities, secondary schools and elementary schools (excluding their subordinate entities) as funded by governments" refers to the "schools that engage in the education for academic credentials" (excluding their subordinate entities). (2) The condition that "all the incomes shall be owned by the schools" means that the incomes gotten from holding classes for advanced study or training classes shall be deposited into the uniform account of the school, and be turned over in full amount to a special fiscal account for management as the extra-budgetary capital. And the school shall uniformly manage them and issue the relevant notes. The incomes gained from holding classes for advanced study or training classes that are deposited into an account opened by the school itself shall not be the incomes owned by the schools, and the tax thereon shall not be exempted. IV. SEPARATELY CALCULATE THE TURNOVERS OF TAX-FREE ITEMS All kinds of schools shall separately calculate the turnovers of tax-free items, and if any school fails to do so, the business tax shall be collected according to the rules. V. OTHER All kinds of schools (including the schools whose incomes are entirely exempted from taxation) shall handle the taxation registration according to the relevant provisions in the law of the people's republic of china on the administration of tax collection, make the tax payment declaration on time, and use invoices according to the provisions; those schools that enjoy preferential policies on the business tax shall apply to the competent taxation authority for handling the formalities for tax reduction and exemption according to the provisions. This Notice shall come into force as of January 1, 2006. |
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