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Announcement of the State Administration of Taxation on the Treatment of Enterprise Income Tax on the Restructuring of the Corporate System of Enterprises owned by the Whole People

Document No.:Announcement No.34, 2017 of the State Administration of Taxation

Taxes:Enterprise Income Tax

Date of Promulgation:

IssueDepartment:State Administration of Taxation

Date of Implementatio:2017-09-22


Announcement of the State Administration of Taxation on the Treatment of Enterprise Income Tax on the Restructuring of the Corporate System of Enterprises owned by the Whole People

Issued by: State Administration of Taxation
Document No.: Announcement No.34, 2017 of the State Administration of Taxation
Date of Issuance: 2017-9-22

In order to implement the “Guiding Opinions of the Central Committee of the CPC and the State Council on Deepening the Reform of State owned Enterprises” and the “Circular of the General Office of the State Council on Promulgating the Implementing Proposals for the Restructuring of the Corporate System of Central Enterprises” (Guo Ban Fa [2017] No.69), according to relevant provisions of the “Notice of the Ministry of Finance and the State Administration of Taxation on Issues Concerning Treatment of Enterprise Income Tax in Enterprise Restructuring Business” (Cai Shui [2009] No.59), the treatment issues of enterprise income tax on the restructuring of the corporate system of enterprises owned by the whole people are hereby notified as follows:

I. The restructuring of enterprises owned by the whole people into wholly state-owned companies or wholly state-owned subsidiary companies belongs to “other simple changes in the legal form of the enterprise” as regulated in Article IV of Cai Shui [2009] No.59, and the enterprise income tax can be dealt with in accordance with the following provisions:

In the process of restructuring, the asset evaluation increment is not included in the taxable income; tax base of the asset shall be determined on the basis of its original tax base; depreciation or amortization of asset appreciation shall not be deducted before tax.

II. The relevant materials of asset evaluation increment of enterprises owned by the whole people shall be retained for future reference by the enterprises after the restructuring.

III. This announcement is applicable to the final settlement of enterprise income tax for the year 2017 and subsequent years. The restructuring of the corporate system of enterprises owned by the whole people occurred before, which has not yet been subject to enterprise income tax treatment, may be implemented in accordance with this announcement.

The announcement is hereby notified as above.

State Administration of Taxation
September 22, 2017

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