OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION CONCERNING THE TAX REFUND OF THE DOMESTIC EQUIPMENT PURCHASES OF ENTERPRISES WITH FOREIGN INVESTMENT

The State Administration of Taxation

Official Reply of the State Administration of Taxation Concerning the Tax Refund of the Domestic Equipment Purchases of Enterprises
with Foreign Investment

GuoShuiHan [2001] No.954

December 21,2001

The state taxation bureau of Hainan:

We have received your Referendum concerning the Tax Refund of the Domestic Equipment Purchases of Enterprises with Foreign Investment
(QiongGuoShuiFa [2001] No.114). As for the issue of the tax refund of the domestic equipment purchases of the SIDA Pharmacy Manufacturing
Factory under the SIDA Pharmacy Limited Company of Hainan Province, We now reply after consideration as follows:

With regard to branch companies or branch factories without corporate personality of enterprises with foreign investment but with
independent economic accounting, if they purchase domestic equipments in the name of the enterprises with foreign investment, the
enterprises with foreign investment shall apply for tax refund in accordance with the provisions of the Circular of the State Administration
of Taxation concerning the Issue of the Proposed Managerial Measures for Tax Refund of Domestic Equipment Purchases of Enterprises
with Foreign Investment(GuoShuiFa [1999] No.171). The branch companies (branch factories) without corporate personality under enterprises
with foreign investment shall not apply for tax refund.

Please abide by and carry out the above accordingly.