CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE ISSUE OF WHETHER THE INTEREST AND RENT EARNED BY THE FOREIGN ENTERPRISES WITHIN THE TERRITORY OF CHINA SHOULD BE LEVIED SALES TAX

The State Administration of Taxation

Circular of the State Administration of Taxation on the Issue of Whether the Interest and Rent Earned by the Foreign Enterprises within
the Territory of China Should be Levied Sales Tax

CaiShuiZi [1997] No.35

March 14, 1997

It is reported recently from the localities whether the interest and rent earned by the foreign enterprises that have not set up branches
and institutions within the territory of China should be levied sales tax is not clear. Through study, it should be clarified as
follows:

I.

According to Article 7 of Rules for the Implementation of the Interim Regulations of People’ Republic of China on Sales Tax, the
interest and rent earned from renting the tangible movables property within the territory of China by the foreign enterprises that
have not set up branches and institutions in our country should not be levied sales tax.

II.

This circular entered into force on July 1, 1997. The previous treatment inconsistent with the present Measures, the present Measures
shall prevail.