Laws of the People's Republic of China

State Administration of Taxation

Reply of the State Administration of Taxation on the Relevant Issues Concerning the Tax Refund to Foreign-funded Enterprises for Their Purchase of Homemade Equipments

Guo Shui Han [2006] No. 203

February 22, 2006

The State Taxation Bureau of Jiangsu Province:

Your Request for Instructions on Relevant Issues concerning the Tax Refund to Foreign-funded Enterprises for Their Purchase of Homemade Equipments (Su Guo Shui Fa [2005] No. 287) has been received. After deliberation, a following reply is hereby given as follows:

By referring to the relevant provisions on tax policies for the purchase of imported equipment in the "permitted investment projects whose products are going to be wholly exported directly" in the Guiding Catalogue of Industries by Foreign Investment promulgated by Order No. 25 [2002 ] of the General Administration of Taxation and for balancing the tax burden of imported products and homemade products, the foreign funded enterprises that has enjoyed the tax refund policies for their purchase of homemade equipment in accordance with the provisions on the "permitted investment projects whose products are going to be wholly exported directly" in Category 13 of the Guiding Catalogue of Industries by Foreign Investment cannot directly export all their products within 5 years of supervisory period according to the provisions, all the drawback for their purchase of homemade equipment shall be recovered entirely.