Laws of the People's Republic of China

Reply of the State Administration of Taxation concerning the Issue of Collecting Business Tax on Contracted Labor Services

Guo Shui Han [2006] No. 493

The Bureau of Local Taxation of Xinjiang Uygur Autonomous Region:

Your Request for the Instructions on Collecting Business Tax on Contracted Labor Services (Xin Di Shui Fa [2005] No. 169) has been received, and the reply is hereby given as follows:

Where any construction and installation enterprise sublets part of the pure labor services of an engineering project it undertakes to several construction enterprises, in which the construction and installation enterprise provides the construction technologies and materials and takes charge of supervision over the quality of the project, and the labor services are provided by the employees of the construction enterprises, and the construction enterprises uniformly settle the project money with the construction and installation enterprise in accordance with their respective amount of work . In light of the relevant provisions on the current business tax, the construction labor services provided by the construction enterprises belong to the taxable labor services provided to the construction industry , so the business tax on their incomes shall be collected according to the tax item of "construction industry".

State Administration of Taxation

May 24, 2006