Laws of the People's Republic of China

Circular of the Ministry of Finance and the State Administration of Taxation of the People's Republic of China on Extending the Preferential Taxation Policies on Poultry Industry

Cai Shui [2006] No. 113

The Financial departments (bureaus), state taxation bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the central government and cities specifically designated in the state plan, and financial bureau of Xinjiang Production and Construction Corps:

For purposes of preventing highly pathogenic avian influenza epidemic and continuing to support development of poultry industry, related issues on tax of poultry industry are now announced as follows in accordance with spirit of Circular of General Office of the State Council on Extending the Duration of Support Policies of Poultry Industry (Guo Ban Fa Ming Dian [2006] No.26):

1.

As from Jul 1, 2006 to Dec 31, 2006, value-added tax payers of poultry-processing industry and cold storage industry may enjoy instant refund of value-added tax when processing and selling poultry industry, and are exempted from urban maintenance and construction tax as well educational surcharge.

2.

The income from poultry raising (including breeding poultry raising), processing and cold storage shall be exempted from enterprise income tax of 2006.

3.

The financial special subsidy of enterprise and individual from poultry cull shall be exempted from enterprise income tax or individual income tax; all net loss caused by poultry cull shall be permitted to be listed in pre-tax expenditure.

4.

The reduced value-added tax and income tax shall be dealt with in accordance with the current financial system.

5.

All refunds after export of processed poultry products shall be sent back in time.

6.

If approved by People's Government of provinces, autonomous regions and municipalities, enterprises and individuals operating poultry (including breeding poultry) industry, poultry processing industry and cold storage industry may enjoy an exemption of a reasonable part of city and town land use tax, real estate tax, and vehicle and vessel usage tax in 2006.

7.

Financial and tax departments at all levels shall earnestly implement the preferential taxation polices on poultry industry, so as to build up a sound environment for sustainable, stable and healthy development for poultry industry. All taxation organs shall optimize taxation service, enhance tax management of instant refund of poultry industry, make good use of information of tax and refund declaration of the tax management and imposing system, so as to carry out tax evaluation in accordance with data of practical producing capacity and sales. During the tax evaluation, related departments shall enhance analysis on producing capacity and sales, relations of input and output as well as status of special invoices, preventing phenomenon of false invoice. If encounter any problem in tax evaluation, please transmit to department of tax inspection in time.

8.

Urgent Circular of Ministry of Finance and State Administration of Taxation on Preferential Taxation Policies on Poultry Industry (No.166, 2005) will be terminated at the same time.

The Ministry of Finance

The State Administration of Taxation

Sep 4, 2006