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Unified Record-filing System for Managing Enterprise Income Tax Incentives

The State Administration of Taxation (SAT) has recently issued the Measures for Handling the Matters of Preferential Policies on Enterprise Income Tax, affirming the abolition of administrative approval in all preferential matters of enterprise income tax, which will be replaced by ex post record-filing management.

Meanwhile, a directory of record-filing of enterprise income tax preferential matters management has also been released, regulating the key operations of record-filing in terms of filing time, filing data and information retained for future reference.

The Measures expressly provide that preferential matters of enterprise income tax refer to preferential matters stipulated in the Enterprise Income Tax Law, and preferential matters formulated by the State Council and ethnic autonomous areas authorised by the tax laws. These including tax-exempt income, reduction in taxable income, super deduction, accelerated depreciation, income tax exemption and reduction, credit to taxable income, tax rate reduction, tax credits, and tax relief or exemption enjoyed by ethnic autonomous areas.

“The crux of the measures is to unify management of preferential matters of enterprise income tax. The preferential matters are consolidated into 55 items following regrouping according to the type of concessions and placed under central record-filing management. Local authorities are not allowed to change the mode of management, arbitrarily made into disguised approval," an official of SAT said.

For the convenience of taxpayers, the Measures further streamline record-filing information. Data retained for future reference will be determined centrally. Companies no longer need to provide data which are already in the hands of tax authorities or which can be obtained from the tax returns. According to statistics, three out of the 55 tax incentives do not need record-filing and 28 just need to fill a record form, further reducing the burden on businesses and grassroots tax authorities in handling tax matters.

For the full text of the Measures in Chinese, please see:


Content provided by Picture: HKTDC Research
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