China Exempts Outsourcing Companies from Business Tax

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Aug. 12 – The Chinese government announced on Wednesday that it will exempt offshore service outsourcing companies from business tax in 21 of its major cities from July 1 of this year through to the end of 2013.

The announcement comes as Beijing pushes to promote growth in China’s outsourcing industry to compete with other countries in the region. The 5 percent tax exemption will cover revenue derived from business process outsourcing, information technology outsourcing, and knowledge process outsourcing services, according to a statement released jointly by the nation’s tax, commerce, and finance ministries.

The 21 cities covered under the government notice are: Beijing, Changsha, Chengdu, Chongqing, Dalian, Daqing, Guangzhou, Hangzhou, Harbin, Hefei, Ji’nan, Nanchang, Nanjing, Shanghai, Shenzhen, Suzhou, Tianjin, Wuhan, Wuxi, Xiamen, and Xi’an.