1983.01.01
MINISTRY OF FINANCE
been approved to
establish a resident representative office within China, if the
resident representative office directly signs contracts with and
provides loans to Chinese companies and enterprises, it shall be
permissible to deduct relevant costs and expenses from the interest
obtained therefrom. In order to facilitate computation, 15 per cent
of the amount of interest earned may temporarily be deemed to be
taxable income, and income tax shall be paid in accordance with the
tax rates provided in Articles 3 and 4 of the Income Tax Law
Concerning Foreign Enterprises.
(5) In the case of interest obtained from China on deposits, loans,
funds advanced and deferred payments and on purchased bonds, in
all cases in which it is necessary to grant an exemption from income
tax in accordance with these Provisions, Chinese companies and
enterprises that receive the deposits, accept the loans and funds
advanced, bear responsibility for deferred payments and issue bonds
shall submit all relevant agreements contracts and data on
interest rates to the local tax authorities for appraisal and
determination. No units and individuals that have not gone through
the procedures for appraisal and determination may of their own
accord reduce or exempt the income tax.
(6) These Provisions shall be implemented from January 1,
1983. With respect to contracts that were signed and approved
by the competent departments and became effective before these
Provisions came into effect, where the taxation of interest was
already provided for at that time, the original provisions shall be
implemented and not be changed during the effective term of the
contract (not including extensions of the contract term).
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