Last Call for Tax Exemption of Cultural Enterprises in China

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Mar. 19 – China’s State Administration of Taxation has issued circular Guoshuihan [2010] No. 86, reminding newly established cultural enterprises set-up prior to December 31, 2008 that they are still eligible for corporate income tax exemptions through to December 31, 2010 – a three year period. What qualifies as a cultural enterprise is listed below.

  • Arts performance groups
  • Culture, arts and performance agencies
  • Enterprises involved in art and culture exhibitions, and related publications, film and TV broadcasting
  • Professional performing sites, such as theaters and concert halls
  • The production, creation, publication and distribution of animations and cartoons
  • The production and distribution of TV (including pay and digital TV) and the exporting of TV programs and films
  • Enterprises engaged in the production, development, showing and distribution of films
  • Enterprises involved in the operations of pay TV, and the screening and promotion of access services
  • Enterprises engaged in cable, wireless, and satellite transmission of films and TV broadcasts
  • Enterprises involved with mobile TV, cell TV, online TV, video on demand, and other audio visual business
  • Enterprises involved with the self development and transfer of IP rights related to culture, arts, film and TV broadcasting, as well as agencies and trading of copyrights
  • Enterprises involved with the development and operation of online libraries, newspapers, journals, audio and visual products, electronic publications, games software, online arts and audio-visual products and the online sale of publications
  • Enterprises involved with the digital processing of publications, films, TV programs, repertory works, music, art and other cultural resources
  • Enterprises involved with the publishing of books, newspapers, periodicals, audio-visual products and electronic publications
  • Enterprises involved with the logistics of publications, national and regional chains enterprises, and retail-oriented publications
  • Enterprises involved with the legitimate copying of read-only discs and the production of writable discs
  • Enterprises involved with the electronic printing of books, newspapers, periodicals, audio-visual products, by use of digital printing technologies, computer to plate technologies, automatic high-speed technologies, high-speed binding lines and other high-tech equipment.

The circular is issued with the prior clarification of the 2008 cut-off point for establishment and compliance with China’s various publishing and broadcasting laws.

Applicable entities that may not have applied for tax exemption under these categories and who wish to apply for backdated CIT refunds may contact Sabrina Zhang, the national tax partner for Dezan Shira & Associates, at tax@dezshira.com.