Laws of the People's Republic of China

State Administration of Taxation, State Administration of Foreign Exchange

Circular of the State Administration of Taxation and the State Administration of Foreign Exchange on Not Requiring the Institutions and Individuals within China to Submit Business Tax Payment Vouchers for Paying Technology Transfer Fees Abroad

No. 28 [2005] of the State Administration of Taxation

The bureaus of state taxes and bureaus of local taxes in all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan, all of the branches of the State Administration of Foreign Exchange, the Administrative Departments of Foreign Exchange in Beijing and Chongqing, and the branches of the State Administration of Foreign Exchange in Dalian, Qingdao, Ningbo, Xiamen and Shenzhen:

According to provisions of the Decision of the State Council on Abolishing and Adjusting the Administrative Examination and Approval Items (III) (No. 16 (2004) of the State Council), as of May 19, 2004, where a foreign enterprise or individual enters into a technology transfer agreement with an institution or individual within China, its (his) income due to technology transfer to China shall not be subject to the administrative examination and approval of business tax exemption any longer, but shall be subject to the record-keeping formalities. Accordingly, as of May 19, 2005, where an institution or individual within China purchases foreign exchange in a designated foreign exchange bank to pay the technology transfer fee or makes a payment for the technology transfer fee under the overseas royalty through its foreign exchange account, it needn¡¯t provide any business tax certification issued by the competent bureau of local taxes. However, it shall, according to the Circular of the State Administration of Foreign Exchange and the State Administration of Taxation on Some Issues Concerning the Submission of Tax Payment Certification for the Purchase and Payment of Foreign Exchange for Non-trade Purposes or under Some of the Capital Items (No. 372 [1992] of the State Administration of Foreign Exchange), provide an income tax (including the enterprise income tax and individual income tax) payment certification issued by the competent tax organ.

the State Administration of Taxation

the State Administration of Foreign Exchange

March 7, 2005