The Ministry of Finance and the State Administration of Taxation have released a circular further explaining tax deductions for corporate income tax (CIT) paid overseas.
The circular provides that companies must follow laws and the implementation regulations, tax treaties and provisions as well as determine the current tax exemptions for overseas incomes and limitations on tax credits based on different countries, after calculating the current relevant items related to overseas CIT exemptions.
Resident companies set up with an overseas tax status with no independent access to overseas branches of income, whether or not it is repatriated in Chinese territory, should be included in the company-owned offshore tax year taxable income.
For more detail on CIT issues, please contact Sabrina Zhang, the national tax partner for Dezan Shira & Associates at tax@dezshira.com.
