Laws of the People's Republic of China

The State Administration of Taxation

Circular of the State Administration of Taxation on the Question Concerning the Relations between Financial and Accounting System of Enterprises with Foreign Investment and Foreign-related Taxation Laws and Regulations

GuoShuiFa [1993] No.62

August 11, 1993

The Circular on the Implementation of the General Rules on Enterprise Finance and the Enterprise Financial System of Different Trades by Enterprises with Foreign Investment and the Circular on the Implementation of the Stipulations on Some Questions Concerning the New Accounting System by Enterprises with Foreign Investment respectively issued by the Ministry of Finance in the from of documents Coded (93) Cai Gong Zi No.87 and (93) Cai Kuai Zi No.27. The documents stipulate that enterprises with foreign investment should begin on July 1, 1993 to implement the General Rules on Enterprise Finance, the Rules of Enterprise Accounting and the financial and accounting system of different trades. Recently some regions asked the question as to how to properly handle the relationship between the enterprise financial and accounting system and the foreign-related taxation laws and regulations. We hereby issue the following circular on related questions:

I.

If there are different stipulations in the enterprise financial and accounting system carried out by enterprises with foreign investment and the foreign-related taxation laws and regulations, while calculating tax payment, the enterprise shall implement the stipulations of the foreign-related taxation laws and regulations.

II.

If it is stipulated in the foreign-related taxation laws and regulations that, when calculating tax payment, the taxation handling method can be carried out only after it is examined and approved by the tax authorities, the enterprise shall handle the matter by following the prescribed examination and approval procedures.

III.

With regard to the problems related to taxation encountered by enterprises with foreign investment in the course of implementing the enterprise financial and accounting system, the various local tax authorities should make timely investigation and collection of these problems, offer their opinions on handling the matter and report to the State Administration of Taxation in order to that the administration can conduct unified study and handling the matter.