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Cai Shui [2009] No. 31
Financial departments (bureaus), and state and local tax bureaus of provinces, autonomous regions and municipalities directly under the Central Government, the Financial Bureau of Xinjiang Production & Construction Corp., Guangdong Sub-Administration of China Customs, Special Commissioner’s Offices in Tianjin and Shanghai and Customs directly under the Central Government,
In accordance with the relevant spirits of the Circular of the State Council on Printing and Distributing Two Provisions concerning the Transformation of Commercial Cultural institutions to Enterprises in the Cultural System Reform and Supporting of the Development of Cultural Enterprises (Guo Ban Fa [2008] No. 114), the circular on issues concerning tax policy for cultural enterprises is hereby notified as follows:
Article 1 The competent administrations of radio, film and television (at national, provincial, city and county level) shall be responsible for approving the exemption of VAT and business tax on incomes of film corporations groups (inclusive of their member enterprises), film studios and other film enterprises that engaged in film production, distribution and projection from sale of film copies, assignment of film copyrights and film distribution as well as film projection in rural areas according to their responsibilities and authorities accordingly.
Article 2 By the end of 2010, the business tax on the basic maintenance fees for digital CATV collected by enterprises engaged in radio and television operation and service provision according to provisions may be exempted after consent of the people’s government at provincial level and approval of the Ministry of Finance and the State Administration of Taxation, and such tax holiday may not exceed 3 years.
Article 3 The export of books, newspapers, journals, audiovisual products, E-publications and completed films and televisions may enjoy VAT export rebates according to provisions.
Article 4 The incomes of cultural enterprises received in places outside China from overseas performances may be exempt from business tax.
Article 5 In the cultural-industry-supporting technology field, the enterprise income tax of the high-tech enterprises recognized according to the Circular on Printing and Distributing the Measures for Administration of Recognition of Hi-tech Enterprises (Guo Ke Fa Huo [2008] No. 172) and the Circular on Printing and Distributing the Guidelines for the Administration of the Recognition of Hi-tech Enterprises (Guo Ke Fa Huo [2008] No.362) shall be reduced and collected at the rate of 15%. The R&D expenses of cultural enterprises incurred by development of new technologies, products and processes are allowed to be additionally deducted in calculation of taxable amounts according to provisions of state taxation laws. The specific scope of cultural-industry-supporting technology field shall be clarified by the Ministry of Science and Technology, the Ministry of Finance, the State Administration of Taxation and the Propaganda Department of the CPC Central Committee separately.
Article 6 With respect to unsalable publications of publishing and distributing enterprises, paper books stocked over 5 years (inclusive of the year of publication, the same below), audiovisual products, e-publications and projection films (inclusive of micro-products) stocked over 2 years and paper journals, wall calendars and New Year pictures stocked over 1 year may be deemed as property loss and made pre-tax deduction. For the unsalable publications which have been made pretax deduction as property loss while handled in another year, the incomes from such handling shall be calculated in the taxable incomes of the year.
Article 7 For import of self-use equipment and parts, assembles and spares thereof which cannot be produced in China for producing major cultural products, the import duties may be exempted according to relevant provisions of current tax policies.
Article 8 With respect to new cultural enterprises established before Dec. 31, 2008, the preferential policies for their income tax may be executed in accordance with the provisions of No. 2 document of Cai Shui [2005].
Article 9 The Circular herein applies to all cultural enterprises. Cultural enterprises refer to the enterprises engaged in press and publication, radio, film and television and culture and arts. Please see the annex for specific scope for cultural enterprises.
Unless explicitly prescribed in the aforesaid articles, the execution period for the above-mentioned preferential tax policies shall be from Jan. 1, 2009 to Dec.31, 2013.
Annex:
Specific Scope for Cultural Enterprises
1. Art performance groups;
2. Culture, art and performance broker enterprises
3. Enterprises engaged in press and publication, radio, film and television and culture and art exhibition;
4. Professional performance sites including theatres and concert halls for performance activities;
5. Cultural relics shops established upon approval of state cultural administrative authorities;
6. Enterprises engaged in creation, publication and production of animations and caricatures and production and distribution of cartoons;
7. Enterprises engaged in producing and distributing radio and television (inclusive of pay and digital radios and TVs) programs and those engaged in exporting radio and television programs and films;
8. Enterprises engaged in production, developing and printing, distribution and projection of films (inclusive of digital films);
9. Enterprises engaged in operation of pay radio and TV channels, integrated broadcasting and promotion of programs and access service promotion;
10. Enterprises engaged in wire, wireless and satellite transmission of radio, film and television programs;
11. Enterprises engaged in audiovisual program businesses including mobile TV, mobile phone TV, online TV and VOD;
12. Enterprises engaged in self-development and assignment of intellectual property rights related to culture and art, radio, film and television and publications; and those engaged in agency and trade of copyrights;
13. Enterprises engaged in development and operation of online books, newspapers, journals, audiovisual products, e-publications, game software and art works and enterprises engaged in sale of publications through internet upon approval of state competent administrations;
14. Enterprises engaged in digital processing of publications, films, television programs, plays, music and artistic works and other cultural resources;
15. Enterprises engaged in publishing books, newspapers, journals, audiovisual products and e-publications;
16. Enterprises engaged in logistic delivery of publications; and national or regional publication distribution chain enterprises, enterprises engaged in import and export of publications and retail-centered publication distribution enterprises at county level or below that established upon approval of state competent administrations;
17. CD copy and recordable CD production enterprises established upon approval of competent press and publication administrative departments; and
18. Printing enterprises engaged in printing books, newspapers, journals, audiovisual products and e-publications with hi-tech technologies and equipment including digital printing technologies, CTP, high-speed and multi-color automatic printing machines and high-speed bookbinding flow-lines.
Ministry of Finance
General Administration of Customs
State Administration of Taxation
Mar. 27, 2009
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