AmCham-China

Deloitte Tax Analysis: More guidance on calculation of tax for nonresident establishments

The State Administration of Taxation (SAT) issued two circulars on 20 February 2010 (Guoshuifa [2010] No. 19 (Circular 19) and Guoshuifa [2010] No. 18 (Circular 18)) that provide guidance on the calculation of Chinese Enterprise Income Tax (EIT) by nonresident companies with establishments in China.  Circular 19 is applicable to nonresidents as stipulated in paragraph 2 of article 3 of the EIT Law, i.e. nonresident companies that derive China-source income from their establishments in China and non-China-sourced income that is effectively connected with the establishments in China.  These two circulars, taken together with various previous circulars addressing the tax treatment of nonresident companies, indicate the continued focus and intent of the SAT to enforce the administration of nonresident companies.  Please open and read the attachment for more details.
 

Deloitte China Tax Analysis - March 9, 2010 ( English, Chinese)