Notice On The Business Tax Exemption On Offshore Service Outsourcing Business In Pilot Cities

Caishui [2010] No. 64 (Circular 64)

Beijing, Tianjin, Dalian, Heilongjiang, Shanghai, Jiangshu, Zhejiang, Anhui, Jiangxi, Fujian, Xiamen, Shandong, Hubei, Hunan, Guangdong, Shenzhen, Chongqing, Sichuan, Shanxi Provincial (municipalities, municipalities with independent planning status) Department of Finance (Bureau), Local Taxation Bureau and The Competent Commerce Department:

To further promote the offshore outsourcing business development, The State Council has ratified the following notice on the offshore service outsourcing business tax policy:

1. Companies registered in the 21 Chinese service outsourcing pilot cities, including Beijing, Tianjin, Dalian, Harbin, Daqing, Shanghai, Nanjing, Suzhou, Wuxi, Hangzhou, Hefei, Nanchang, Xiamen, Jinan, Wuhan, Changsha, Guangzhou, Shenzhen, Chongqing, Chengdu and Xi’an, and engaged in offshore service outsourcing business will be exempted from business tax on income derived from offshore service outsourcing business during the period of 1st July 2010 to 31st December 2013.

2. Income derived from offshore service outsourcing business refers to the gross incomes received from overseas pursuant to an outsourcing service contract concluded between the Chinese enterprise and the overseas enterprise. The Chinese enterprise or its direct subcontracting enterprise will only provide the outsourcing service on the Information technology Outsourcing (ITO), Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO).

3. Any Business Tax paid during the period of 1st July 2010 to the date of this Circular, but eligible for the exemption from offshore service outsourcing business can be used to offset against future Business Tax payable in 2010 and the balance will be refunded after the conclusion of 2010.

Ministry of Finance, State Administration of Taxation and Ministry of Commerce.
28th July, 2010