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	DECISION ON THE USE OF INTERIM REGULATIONS CONCERNING VALUE-ADDED TAXES, CONSUMPTION TAXES AND BUSINESS TAXES ON FFEs AND FOREIGN ENTERPRISES

	(Adopted at the Fifth Meeting of the 8th Standing Committee of the National People's Congress on December 29, 1993)


SUBJECT : TAXATION; ENTERPRISES WITH FOREIGN INVESTMENT
ISSUING DEPARTMENT : STANDING COMMITTEE OF THE NATIONAL PEOPLE¡¯S CONGRESS
ISSUE DATE : 12/29/1993
IMPLEMENT DATE : 12/29/1993
LENGTH : 524 words
TEXT :

The fifth meeting of the 8th Standing Committee of the National People's Congress considered a motion submitted by the State Council for the use of the interim regulations concerning the levy of value-added taxes, consumption taxes and business taxes on FFEs and foreign enterprises, and, in order to unify the tax system, rationalize the tax burden, improve the investment environment in the country and meet the needs for the establishment and development of a socialist market economy, took the following decision:

(1) Before the formulation of relevant tax laws, the Interim Regulations on Value-added taxes, the Interim Regulations on Consumption Taxes and the Interim Regulations on Business Taxes promulgated by the State Council should be applied to FFEs and foreign enterprises as of January 1, 1994. The Regulations on Industrial and Commercial Consolidated Taxes (draft) of the People's Republic of China, passed in principle by the Standing Committee of the National People's Congress at its 101st meeting on September 11, 1958 and promulgated by the State Council for trial implementation on September 13, 1958, are annulled at the same time.

With regard to Sino-foreign cooperation in the extraction of offshore oil and gas on which value-added taxes are levied in kind, the State Council will make special stipulations on the tax rates and methods of tax collection on the area.

(2) The increased tax payment from increased tax obligation arising from the levy of newly introduced value-added taxes, consumption taxes and business taxes will be refunded to the foreign-funded enterprises upon their application and the tax office's approval, for a period of no more than five years of their approved period of operations. The foreign- funded enterprises mentioned refer to those which had obtained approval for their establishment before December 31, 1993. The same refunding arrangement is applied to those foreign-funded enterprises which have no specified periods of operations, also for no more than five years. Concrete measures for these arrangements will be worked out by the State Council.

(3) Apart from value-added, consumption and business taxes, those taxes leviable on FFEs and foreign enterprises for which the law has made stipulations shall be implemented according to law and those taxes which the law has no special stipulations, shall be imposed according to regulations of the State Council.

The FEEs mentioned in this Decision refer to the Chinese-foreign joint equity ventures, Chinese-foreign contractual cooperative ventures and solely-foreign-owned enterprises in China.

The foreign enterprises mentioned in this Decision refer to foreign corporations, enterprises and other economic entities which have set up their own institutions and workplaces in China for production and business operations, or have not set up their own institutions and workplaces in China, but derive income from sources in the country.

The Decision will come into force from the date of its promulgation.