ANNOUNCEMENT 08 Oct 2014In October 2014, the government of China announced a targeted tax change.
NUMBER OF INTERVENTIONS
On 8 October 2014, the State Administration of Taxation published Notice No. 59, updating the Notice No. 65 of 2010. The new policy is aim to support the development of the Chinese technology outsourcing services.
According to the notice, technology outsourcing service firms in 21 cities (Beijing, Tianjin, Shanghai, Chongqing, Dalian, Shenzhen, Guangzhou, Wuhan, Harbin, Chengdu, Nanjing, Xi'an, Jinan, Hangzhou, Hefei, Nanchang, Changsha, Daqing, Suzhou, Wuxi, Xiamen) can countinue receiving a reduced income tax rate of 15% from 1 January 2014 to 31 December 2018. The cost of employee trainings on high-tech related fields can also be tax deductible.
Stated in the notice, the eligible firms should have at least 50% of employees with at least a university bachelor degree. Additionally, at least 35% of the company's annual revenue should come from cross-border services.