1993.12.03
STATE BUREAU OF TAXATION
CIRCULAR ON SOME EXTERNAL TAXATION POLICY QUESTIONS CONCERNING PILOT
ENTERPRISES EXPERIMENTING WITH THE SHAREHOLDING SYSTEM
(State Administration of Taxation: 3 December 1993 Coded Guo Shui Fa
[1993] No. 139)
To the tax bureaus of various provinces, municipalities and autonomous
regions, the tax bureaus of various cities with independent planning and
various sub-bureaus of the Offshore Oil Tax Administration:
In accordance with the stipulations of the Circular of the State
Administration of Taxation on the Shareholding System Pilot Enterprises
Applicable Taxation Legal Question, a document Coded Guo Shui Fa [1993]
No. 087, we hereby clarify as follows the taxation policy question
related to shareholding enterprises which pay various taxes in light of
the external tax law:
I. The taxation handling of asset revaluation and variable-value
(1) With regard to enterprise with foreign investment which are
reorganized or merged with other enterprises into shareholding
enterprises, and the original enterprise with foreign investment which
have cancelled registration with the administrative department for
industry and commerce, their changed value of subscribed shares used as
investment and their book value shall be included in gains and losses of
the original enterprise with foreign investment, and on the basis of
which enterprise income tax is calculated and paid.
(2) If the original enterprise with foreign investment has conducted
taxation handling in accordance with the stipulations of the above
clause, the newly organized shareholding enterprise may reevaluate the
assets of the original enterprise with foreign investment and affirm
their value and enter it as investment into the account book and, on the
basis of which calculate the depreciation or amortization of the assets;
if the original enterprise with foreign investment has not conducted
taxation handling in accordance with the stipulations of the above
clause, that changed value of the assets of the original enterprise with
foreign investment, which is reassessed by the newly organized
shareholding enterprise, shall be readjusted in light of the method
stipulated in Clause (3) of this Article.
(3) If the shareholding enterprise sells shares to society or increases
the issuance of shares and carries out reevaluation of various assets in
accordance with related stipulations, the changed value, when the
enterprise declares payment of enterprise income tax, shall not be
included in the enterprise gains and losses and the book value of the
enterprise assets shall not thereby be readjusted. If the enterprise has
made account readjustment in its account book of the changed value of
the reevaluated asset[1] [2] [3] 下一页
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