Laws of the People's Republic of China

The State Administration of Taxation

Official Reply of the State Administration of Taxation on the Issue of Tax Year for Enterprises with Foreign Investment

GuoShuiHan [2002] No.361

April 25, 2002

Shanghai Municipal State Taxation Bureau and Local Taxation Bureau:

The Request for Instruction on Whether Enterprises with Foreign Investment Can Apply to Change the Tax Year (HuiGuoShuiWai [2002] No.15) has been received. We hereby give our reply as follows after deliberation:

I.

In accordance with Article 8 of the Rules for the Implementation of the Income Tax Law of the People's Republic of China for Enterprises with Foreign Investment and Foreign Enterprises, the tax year for enterprises with foreign investment shall begin on 1 January and end on 31 December of the Gregorian Calendar.

II.

Article 16 of the Circular of the State Administration of Taxation on Some Business Disposal Issues Concerning the Implementation of the Income Tax Law for Enterprises with Foreign Investment and Foreign Enterprises (GuoShuiFa [1991] No. 165) shall be ceased from execution from 2002; where, prior to 2002, any enterprise with foreign investment was approved by the taxation authority to take the accounting year of 12 months as the tax year, it may continue to execute until the expiry of the tax year approved.