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	CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON REGULATING THE SCOPE FOR THE PAYMENT OF ENTERPRISE INCOME TAXES ON A CONSOLIDATED BASIS

	(No.48 [2006] of the State Administration of Taxation, January 17, 2006)


SUBJECT : CORPORATE TAX; PAYMENT; CONSOLIDATED BASIS
ISSUING DEPARTMENT : THE STATE ADMINISTRATION OF TAXATION
ISSUE DATE : 01/17/2006
IMPLEMENT DATE : 01/17/2006
LENGTH : 378 words
TEXT :

In order to reinforce the collection management of the payment of enterprise income taxes on a consolidated basis (hereinafter referred to as the "consolidated tax payment"), we hereby circulate a notice on the relevant issues on regulating the scope for consolidated tax payment as follows:

I. The relevant examination and approval provisions on consolidated tax payment shall be rigidly enforced. Under the prevailing provisions, the consolidated payment of enterprise income taxes shall be subject to the examination and approval of the State Administration of Taxation. The taxation authorities at all levels shall rigidly enforce the relevant examination and approval provisions on consolidated tax payment, and shall not carry out the examination and approval by exceeding their authorities. Any examination and approval of consolidated tax payment by exceeding the authorities or expanding consolidated tax payment shall be corrected.

II. Any of the following enterprises may apply for consolidated tax payment according to the provisions:

(1) the 120 large-scale pilot enterprise groups as determined by the State Council;

(2) the enterprise groups as approved by the State Council for implementing the policies concerning pilot enterprise groups and consolidated tax payment;

(3) the railway, air transport, posting and telecommunications enterprises as well as the financial and insurance enterprises (including the securities institutions and other non-bank financial institutions) as prescribed in the Interim Regulation of the People's Republic of China on Enterprise Income Tax and the detailed rules for the implementation thereof;

(4) the pilot enterprise groups for the cultural system reform;

(5) the surviving enterprises with the nature of enterprise groups after the reorganization and restructuring of those enterprises for consolidated tax payment.

III. An entity at the locality of accounting shall uniformly pay the tax for its branches implementing non-independent accounting according to the Interim Regulation of the People's Republic of China on Enterprise Income Tax and the detailed rules for the implementation thereof. Any dispute over the locality of accounting shall be handled in light of the specific situations:

(1) If both the headquarters and the braches are situated within one province, the provincial taxation authority may determine the place for tax declaration;

(2) If the headquarters and braches are situated between two or more provinces, the State Administration of Taxation may determine the place for tax declaration.