CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION CONCERNING PAYMENT OF TAX ON INCOMES IN FOREIGN CURRENCY GAINED BY ENTERPRISES WITH FOREIGN INVESTMENT AND FOREIGN ENTERPRISES

The State Administration of Taxation

Circular of the State Administration of Taxation Concerning Payment of Tax on Incomes in Foreign Currency Gained by Enterprises with
Foreign Investment and Foreign Enterprises

GuoShuiFa [1993] No.013

January 21,1993

The tax bureaus of various provinces, autonomous regions and municipalities directly under the Central Government, the taxation bureaus
of various municipalities separately listed on the State plan and sub-bureaus of Offshore Oil Taxation Administration:

In line with related stipulations of the Tax Law, you are hereby notified as follows about how enterprises with foreign investment
and foreign enterprises shall pay tax on their foreign currency incomes:

I.

Enterprises with foreign investment which have incomes gained from their production and operation and their incomes are all in foreign
currency, shall convert their foreign exchange into Renminbi at the Bank of China in accord with the listed price of the day their
tax payment receipts are issued by tax authorities and then pay tax.

II.

Enterprises with foreign investment, which have incomes in both foreign currency and Renminbi gained from their production and operation,
may pay tax with Renminbi gained from production and operation instead of with foreign currency. The enterprise shall not use the
Renminbi gained from borrowing, share-holder’s input or gained through regulation to pay tax instead of foreign currency income.

If the Renminbi incomes gained from production and operation are insufficient to pay dutiable tax, to make up the deficiency, the
enterprises with foreign investment concerned shall use the foreign currency gained from its production and operation and exchange
it into Renminbi at the Bank of China in accord with the listed price of foreign exchange on the day its tax payment receipt is issued
by tax authorities and then pay tax.

III.

Foreign companies, enterprises and other economic organizations as well as foreign personnel shall also pay tax in line with the above-
mentioned principle for their incomes or other gains.

IV.

The Circular shall enter into force as of the day of the receipt of the document, if the original stipulations are contradicting this
Circular, this Circular shall prevail.