CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION CONCERNING THE ASCERTAINING OF THE EXPLANATION OF PRODUCTIVE ENTERPRISES WITH FOREIGN INVESTMENT IN OTHER INDUSTRIES

The State Administration of Taxation

Circular of the State Administration of Taxation Concerning the Ascertaining of the Explanation of Productive Enterprises with Foreign
Investment in other Industries

GuoShuiFa [1992] No.109

April 29, 1992

The tax bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately
listed on the State plan:

According to Subparagraph 10 of Paragraph 1 of Article 72 of the Rules for the Implementation of the Law of Income Tax of Enterprises
with Foreign Investment and Foreign Enterprises (hereafter as “the Rules for the Implementation”), the ascertaining of the explanation
of productive enterprises with foreign investment in other industries is as follows:

1.

The enterprises with foreign investment that involve in the following business may be regarded as productive enterprises with foreign
investment:

(1)

Involving in designing of construction, installation, assembling projects or providing services for projects (including consulting
services);

Consulting services include reforming the project construction or the existing productive technique, improving the management of production
and operation, technique choosing or providing technique assistance or technique instruction in promoting or increasing function,
efficiency, quality of existing productive facilities or products;

(2)

Involving in rearing, breeding (including aquatic products breeding), planting (including flower planting), feeding livestock and
flocks, and animal like dogs, cats;

(3)

Involving in scientific research and development of productive technology;

(4)

Providing storage, transportation services for clients by self-owned conveyance or storing facilities.

2.

Those who specialized in following business shall not be treated as productive enterprises with foreign investment:

(1)

Involving in fitment, upholster in and out room or installation and adjustment of inner room facilities;

(2)

Involving in business of making advertisement, business card, pictures or book issuing;

(3)

Involving in food processing and making, mainly for sales in self-established restaurants or shops;

(4)

Involving household appliances repairing or living apparatus repairing.

3.

“The repairing service in productive facilities, precision instruments ” referred in Subparagraph 9 of Paragraph 1 of Article 72
of the Rules for the Implementation, doesn’t include the repairing of vehicles, electric instruments, computer supervision system
or common instruments, meters.