Commercial Information Circulars
24-hour hotline : 23 922 922
e-mail address : enquiry@tid.gov.hk
Ref : EIC 631/2/7
21 March 2007
Dear Sirs,
Commercial Information Circular No. 132/2007
The Mainland of China : Law on Corporate Income Tax
The Fifth Session of the Tenth National People's Congress passed the "Law on Corporate Income Tax" on 16 March 2007, which will take effect from 1 January 2008.
- The Law governs the elements of taxable income, preferential treatment, collection and administration of corporate income tax, etc. Among other things, the standard corporate tax rate is set at 25%. Slim profit-making enterprises fulfilling certain criteria will be subject to a reduced corporate tax rate of 20% and high-technological enterprises with support from the State will be subject to a reduced corporate tax rate of 15%.
- For enterprises that have been established prior to the promulgation of the Law and are enjoying preferential tax rates in accordance with the relevant laws and regulation at the time of their establishment, a 5-year transitional period will be provided under which the applicable corporate tax rate will be gradually increased to the new tax rate (i.e. 25%). For enterprises that are eligible for fix period tax benefits according to the relevant regulations, they can still enjoy such benefits until the period ends. However, for enterprises that are not enjoying tax benefits as they have not started to make profits, the eligible period of the tax benefits will be counted from the year the Law takes effect.
- A copy of the "Law on Corporate Income Tax" is attached at Annex (pdf format) for reference.
ENQUIRIES
- If you have any questions on the content of this circular, please contact Ms. Eugenia CHAN at 2398 5444.
Yours faithfully,
(Hugo CHIU)
for Director-General of Trade and Industry
| Note : | While every effort is made to ensure the accuracy of the above information, the Department cannot guarantee this to be so and will not be held liable for any reliance placed on the same. |