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	OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ON THE ISSUE CONCERNING THE EXEMPTION OF BUSINESS TAX ON THE INCOME OBTAINED FROM TRANSFER OF TECHNOLOGIES BY JAPAN NIDEC CORPORATION AND OTHER FOREIGN ENTERPRISES

	(Letter No. 424 [2003] of the State Administration of Taxation; Date of Promulgation: April 21, 2003)


SUBJECT : CORPORATE TAXATION; INCOME EXEMPTION; INCOME FROM TRANSFER OF TECHNOLOGIES
ISSUING DEPARTMENT : THE STATE ADMINISTRATION OF TAXATION
ISSUE DATE : 04/21/2003
IMPLEMENT DATE : 04/21/2003
LENGTH : 600 words
TEXT :

Regarding "Request for Instructions on the Relevant Issues concerning the Business Tax of Japan Nidec (Dalian) Co., Ltd. and Other Foreign-Funded Enterprises" (No. 19 [2003] of Dalian Local Taxation Bureau), "Request for Instructions on Reduction and Exemption of Business Tax of Goodyear Dalian Tire Co., Ltd. and Other Foreign-Funded Enterprises¡± (No. 20 [2003] of Dalian Local Taxation Bureau) and "Request for Instructions on the Application by Dalian Matsushita Communication Industrial Co., Ltd. for Reduction and Exemption of Business Tax" (No. 23 [2003] of Dalian Local Taxation Bureau) have been received. In accordance with the relevant provisions in the "Notice of the Ministry of Finance and the State Administration of Taxation on the Relevant Taxation Issues concerning the Implementation of the Decision of the Central Committee of the Communist Party of China and the State Council on Strengthening Technical Innovations, Developing Hi-Techs, and Realizing Industrialization" (No. 273 [1999] of the Ministry of Finance) and the provisions in the "Notice of the State Administration of Taxation on Clarifying the Scope for Exemption of Business Tax on the Income Obtained from Transfer of Technologies by Foreign Enterprises and Foreign Individuals" (No. 166 [2000] of the State Administration of Taxation), and upon verification, we approve that Japan Nidec Corporation and the following foreign enterprises which have concluded technology transfer contracts with Chinese enterprises may be exempted from paying business tax for the income obtained from transfer of technologies after October 1, 1999. However, the business tax shall still be levied according to the rules upon the technical service fee irrelevant to technology transfer and upon the trademark use fee contained in the income from transfer of technologies.

I. The income from transfer of relevant technologies (the part not exceeding 50% among the total contractual amount) under the "Contract on Permit of Technologies for Manufacturing Precision Motors and Various Electric Products" concluded between Japan Nidec Corporation and Japan Nidec (Dalian) Co., Ltd. (Contract No.: NCJ-NCD96-0101).

II. The income from transfer of relevant technologies (the part not exceeding 50% among the total contractual amount) under the "Contract for Technical Cooperation on Molded Case Circuit Breakers, Earth Leakage Circuit Breakers, Circuit Protectors, Electromotors and Other Similar Products" concluded between Japan Fuji Electric Corporation and Fuji Electric (Dalian) Co., Ltd. (Contract No.: FD-99-01022).

III. The income from transfer of relevant technologies under the "Technology Transfer Contract and Memorandum" (Contract No.: JP-EGD-97-001) concluded between Japan Toshiba Corporation and Dalian Toshiba Television Co., Ltd.

IV. The income from transfer of relevant technologies under the "Contract on Supply of Canned Motor Pump Manufacturing Technologies" concluded between Japan Teikoku Electric Co., Ltd. and Dalian Teikoku Canned Motor Pump Co., Ltd. (Contract No.: Contract 0003 of J: Teikoku).

V. The income from transfer of relevant technologies under the "Contract on Technology Assistance and Permit of Radial Car Tires" concluded between US Goodyear Tire & Rubber Company and Goodyear Dalian Tire Co., Ltd. (Contract No.: GCJV9403).

VI. The income from transfer of relevant technologies under the "Contract for Technology Transfer concerning Ball Screw Components and Parts" concluded between Japan THK Corporation and Dalian THK Wazhou Industrial Co., Ltd. (Contract No.: 199906001).

VII. The income from transfer of relevant technologies under the "Contract on Know-How Transfer and Technical Services concerning Hot Dip Galvanizing Lines" concluded between ThyssenKrupp Steel and Angang New Steel ThyssenKrupp Galvanized Steel Plates Co., Ltd. (Contract No.: 02DEDLY32TAGAL022).

VIII. The income from transfer of relevant technologies (the part not exceeding 50% among the total contractual amount) under the "Contract for Technical Cooperation concerning Automobile Stereos" concluded between Japan Matsushita Communication Industrial Corporation and Dalian Matsushita Communication Industrial Co., Ltd. (Contract No.: MCDL950509A).