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Ministry of Finance, State Administration of Taxation
Ministry of Finance and State Administration of Taxation Notice on the Procedures for the Examination and Approval of Foreign-capital
Enterprises’ Implementation of the Enterprise Income Tax Policies for Software and Integrated Circuit Enterprises
Cai Shui [2005] No. 109
The finance departments (bureaus), state taxation bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities
directly under the Central Government and the cities specifically designated in the state plan, the Finance Bureau of Xinjiang Production
and Construction Corps:
With a view of implementing the Administrative License Law of the People’s Republic of China, carrying out the spirits of administrative
examination and approval system reform and improving the efficiency of taxation administration, the relevant procedures relating
to foreign-capital enterprises’ implementation of the provisions as specified in Article 1 (6) and Article 2 (2) of the Notice
of the Ministry of Finance, State Administration of Taxation and General Administration of Customs about the Relevant Tax Policies
for Encouraging the Development of Software and Integrated Circuit Industry (No. 25 [2000] of the Ministry of Finance) are hereby
notified as follows:
The implementation of the provisions in Article 1 (6) and Article (2) of Doc. 25 [2000] of the Ministry of Finance that “a foreign-capital
enterprise with an investment above USD 30 million shall be reported to the State Administration of Taxation for approval; a foreign-capital
enterprise with an investment less than USD 30 million shall be examined and approved by the competent tax organ” shall be stopped.
When an enterprise files an income tax return, it may, by itself, determine the number of years for the depreciation or amortization
of the software or productive equipment that accord with the provisions in Article 1 (6) and Article (2) of the Doc. No. 25 (2000)
of the Ministry of Finance. However, once the number of years of depreciation or amortization is selected and determined, no change
may be made arbitrarily.
When the local competent tax organ conducts an annual income tax audit, it may require the enterprises to provide the relevant factual
evidence or materials (including on-the-spot investigations), for which the provisions in Article 1 (6) and Article 2 (2) of Doc.
No. 25 [2000] Ministry of Finance are applicable to these enterprises. Once it is determined upon audit that an enterprise doesn’t
conform to the provisions in Article 1 (6) and Article 2 (2) of Doc. No. 25 [2000] Ministry of Finance, the competent tax organ
may handle the tax-related affairs in accordance with the relevant provisions in the Law of the People’s Republic of China on the
Administration of Tax Collection.
Ministry of Finance
State Administration of Taxation
July 1, 2005
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