Laws of the People's Republic of China

State Administration of Taxation

Circular of the State Administration of Taxation on the Effectiveness of the Exchange of Letters for Mutual Exemption of Tax on International Transport Income between China and Turkey

Guo Shui Fa [2006] No.5

The administrations of state taxation and local taxation of all the provinces, autonomous regions, municipalities directly under the Central Government, and cities specifically designated in the state plan, and Yangzhou Institute of Taxation,

The Exchange of Letters between the Government of the People's Republic of China and the Government of the Republic of Turkey for mutual exemption of value-added tax, business tax or other taxes of the similar nature on international transport income from the other party of contracting state of air transport enterprises in one contracting state was signed by the authorized representatives of both governments, and became effective on November 18, 2005, and is hereby printed and distributed to you. Please implement accordingly.

Annex:

I. Letter of the Finance Minister of Republic of Turkey Kemal Unakitan Addressed to the Director General Xie Xuren of the State Administration of Taxation of the People's Republic of China (translation)

II. Reply Letter of the Director General Xie Xuren of the State Administration of Taxation of the People's Republic of China Addressed to the Finance Minister of the Republic of Turkey Kemal Unakitan (translation)

State Administration of Taxation

January 12, 2006 Annex: ILetter of the Finance Minister of Turkey Addressed to the Director General Xie Xuren of the State Administration of Taxation of the People's Republic of China (translation)

Mr. Xie Xuren

Director of the State Administration of Taxation of the People's Republic of China

Your Excellency,

I am honored to refer to the issue of exemption of tax on the profits and incomes obtained from undertaking international transport by the air transport enterprises of both countries, and suggest making the following arrangements on behalf of the Government of the Republic of Turkey:

According to the Agreement of the Republic of Turkey and the People's Republic of China on Avoidance of Double Tax Collection and Prevention of Evasion of Taxes, which was signed on May 23rd, 1995, the income tax shall be exempted in another contracting state. on the profits and incomes obtained from another contracting state through undertaking international transport business by the air transport enterprises of one contracting state . Value-added tax, business tax or any other tax of the similar nature shall be exempted in another contracting state on the income obtained from another contracting state through undertaking international transport business by the air transport enterprises of one contracting state.

I am honored to suggest that this Letter and the Letter of Reply acknowledged by Your Excellency on behalf of the government of the People's Republic of China's acceptance of the aforesaid suggestions proposed by the Government of the Republic of Turkey shall constitute an agreement between the governments of both countries.

Finance Minister of the Republic of Turkey

Kemal Unakitan (Signature)

October 21, 2005 Annex: IIReply Letter of the Director General Xie Xuren of the State Administration of Taxation of the People's Republic of China Addressed to the Finance Minister of Turkey (Translation)

Kemal Unakitan, finance minister of the Republic of Turkey,

Your Excellency,

I am honored to acknowledge the receipt of your Letter dated October 21, 2005, which reads as follows,

I am honored to refer to the issue of exemption of tax on the profits and incomes obtained from undertaking international transport by the air transport enterprises of both countries, and suggest making the following arrangements on behalf of the Government of the Republic of Turkey:

According to the Agreement of the Republic of Turkey and the People's Republic of China on Avoidance of Double Tax Collection and Prevention of Evasion of Taxes, which was signed on May 23rd, 1995, the income tax shall be exempted in another contracting state on the profits and incomes obtained from another contracting state through undertaking international transport business by the air transport enterprises of one contracting state. Value-added tax, business tax or any other tax of the similar nature shall be exempted in another contracting state on the income obtained from another contracting state through undertaking international transport business by the air transport enterprises of one contracting state..

I am honored to suggest that this Letter and the Letter of Reply acknowledged by Your Excellency on behalf of the government of the People's Republic of China's acceptance of the aforesaid suggestions proposed by the Government of the Republic of Turkey shall constitute an agreement between the governments of both countries.

I am honored to confirm and accept the said suggestions on behalf of the government of the People's Republic of China and refer to that the said agreement shall come into effect from the date of this Letter of Reply.

Director General of the People's Republic of China

Xie Xuren (Signature)

November 18, 2005