1982.09.21
STATE COUNCIL OF CHINA
ANNOUNCEMENT OF THE STATE COUNCIL ON TAXATION OF JOINT
VENTURES AND COOPERATIVE OPERATIONS WITH CHINESE-FOREIGN INVESTMENT
(Issued by the State Council of China on September 21, 1982)
On September 10, 1980, the National People's Congress
promulgated "The Income Tax Law on Joint Ventures with Chinese and
Foreign Investment" and " The Individual Income Tax Law"; and
later on December 13, 1981, it also issued "The Income Tax Law on
Foreign Enterprises". Before the promulgation of these laws, some
localities, departments and enterprises, on the approval by the
competent authorities of the state, had signed contracts of joint
ventures and cooperative operations with foreign and Hongkong
businessmen, some of which included the provisions for the
payment of taxes. The General Taxation Bureau of the Ministry of
Finance has laid down that the question of tax payment should be
carried out according to the original provisions in the contracts. But
as things are, there still remain some disputes and arguments on this
point. In order to implement the policy correctly, the following
announcement is made:
(1) Before the promulgation of "The Income Tax Law on Joint
Ventures with Chinese and Foreign Investment" and "The Income
Tax Law on Foreign Enterprises", any contract signed with the
approval of the competent authorities of the state, with foreign
and Hongkong firms for joint ventures and cooperative operations
which provides a preferential treatment of income tax payment on
their enterprises, and which states clearly that the import goods
necessary for the projects will be given a preferential treatment of
taxation should be carried out according to the original provisions.
(2) Provisions on preferential treatment of taxation given to
foreign and Hongkong businessmen for their income derived from their
permission to use their patent and copyrights should also be
carried out according to the original contracts.
(3) Before "The Individual Income Tax Law" was promulgated, provided
it has been approved by the competent authorities of the state, any
preferential treatment of income tax given to an individual should
also be carried out according to the original provisions as stipulated
in the contracts.
The above three points should continue until the original contracts
expire. If the contracts are extended, tax should be paid
according to the regulations of "The Income Tax Law on Joint
Ventures with Chinese and Foreign Investment". "The Income Tax Law
on Foreign Enterprises" and "The Individual Income Tax Law". All
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