Approval of Dealing with the Taxes for Foreign-invested Enterprises and Foreign Enterprises Obtaining Government Subsidies
State Administration of Taxation recently issued a document “About the approval of Dealing with the Taxes for foreign-invested enterprises and foreign enterprises obtaining government subsidies” (This file definitely issues the regulations of the dealing methods of the taxes.)
This document issues that any foreign-invested enterprises obtained free of charge from the assets of the monetary or non-monetary assets belong to the ranges, which depends on the laws, administrative regulations and the provisions of the State Council exempted from corporate income tax. The enterprises also deal with the assets from the government in the same way with the investment assets, which are not included in the taxable income amount.
In addition, all government assets long-term owned by the enterprises in non-currentassetsor current assets which, according to the conditions of the government subsidies, have put into the assets of buying, building and improving. The amount of government subsidies won’t account to the profit and loss of current business charged, but the government subsidies for the purchase and the formation of assets, reduced by the amount of government subsidies after the value of the costs of depreciation or amortization. But coping with the assets buying or forming by the government assets, it will reduce by the amount of government subsidies after the value of the costs of depreciation or amortization.