Taxation breaks to boost outsourcing

13:34, August 12, 2010      

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Business income from offshore service outsourcing can be exempted from business tax in 21 cities, including Beijing, according to a notice on further promoting the development of the offshore service outsourcing industry released by the Ministry of Finance on Aug. 11.

According to the Notice, from July 1, 2010 to Dec. 31, 2013, the business income from offshore service outsourcing can be exempted from business tax in 21 China's model service outsourcing cities, including Beijing, Tianjin, Dalian, Harbin, Daqing, Shanghai, Nanjing, Suzhou, Wuxi, Hangzhou, Hefei, Nanchang, Xiamen, Jinan, Wuhan, Changsha, Guangzhou, Shenzhen, Chongqing, Chengdu and Xi'an.

Business income from offshore service outsourcing refers to the income gained by qualified enterprises from overseas units by providing them information technology, business process and knowledge process outsourcing as specified in the annex of the Notice.

Cooperation between an oversea unit and a domestic qualified enterprise must be based on a commission contract, and the service can be provided by the enterprise or its subcontracted enterprise.

In addition, the notice also provides that exempted business taxes already levied from July 1, 2010 to the arrival date of the notice will be deducted from the future payable business tax of taxpayers, and the remaining sum of collected business tax as of the end of 2010 will directly be refunded to taxpayers.

It is another beneficial policy for the service outsourcing industry in addition to financial support. The People's Bank of China and five other ministries jointly released a notice in September 2010, which provided many supportive policies to the industry, such as expanding financing channels.

By People's Daily Online

(Editor:祁澍文)

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