Laws of the People's Republic of China

Ministry of Finance, State Administration of Taxation

Circular of the Ministry of Finance and the State Administration of Taxation on Relevant Preferential Tax Policies in Poultry Industry

Cai Shui [2005] No.166

To finance departments (bureaus), State taxation bureaus and local taxation bureaus of various provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately listed in the State plan, as well as the finance bureau of the Xinjiang Production and Construction Crops:

In order to address epidemic situation of highly pathogenic avian influenza and subject to spirits of the Several Opinions of the General Office of the State Council of the People's Republic of China on Supporting the Development of Poultry Industry (Guo Fa Ban [2005] No. 56), issued on relevant tax policies in poultry industry are hereby notified as follows:

1.

From November 1, 2005 to June 30, 2006, poultry processing enterprises and poultry refrigeration enterprises which are VAT general taxpayers shall enjoy the policy of refund of VAT after immediately collected, for processing and marketing poultry meat products, and shall be exempted from the urban maintenance and construction tax and the education surtax.

2.

Enterprises engaged in poultry raising (including raising of breeding poultry), processing and refrigeration shall be exempted from 2005's tax imposed on enterprise income generated from the poultry raising (including raising of breeding poultry), processing and refrigeration, and levy of enterprise income tax imposed the same for 2006 shall be separately specified as the case may be.

3.

For special financial subsidies available to enterprises or individuals for poultry capture and killing, enterprise income tax or individual income tax shall be exempted; Net loss sustained by enterprises due to poultry capture and killing shall be permitted to be disbursed in full before income tax.

4.

Reduced VAT and income tax shall be levied subject to existing financial system.

5.

Tax refundable after processed poultry products have been exported shall be ensured to be promptly refunded to enterprises in full.

6.

For land, house property, vehicles and vessels used by poultry raising (including breeding poultry raising), processing and refrigeration enterprises and individuals for their production and business operation, urban and township land use tax, house property tax as well as vehicle and vessel usage tax imposed for the first half of 2006 may, with approval from people's governments of various provinces, autonomous regions and municipalities directly under the Central Government, be reduced or exempted in an appropriate manner within the whole or part of the provinces (autonomous regions and municipalities directly under the Central Government).

You are requested to implement accordingly.

Ministry of Finance

State Administration of Taxation

December 7, 2005