The Chinese government announced Wednesday (Aug 11) that it will exempt operating taxes on offshore service outsourcing business in 21 cities to promote the development of the industry.
The 5-percent operating tax exemption will run from July 1 this year until Dec. 31, 2013, according to a joint statement released by the Ministry of Finance, the State Administration of Taxation and the Ministry of Commerce Wednesday,
The 21 cities it applies are Beijing, Tianjin, Dalian, Harbin, Daqing, Shanghai, Nanjing, Suzhou, Wuxi, Hangzhou, Hefei, Nanchang, Xiamen, Ji'nan, Wuhan, Changsha, Guangzhou, Shenzhen, Chongqing, Chengdu and Xi'an.
According to the statement, offshore service outsourcing income refers to service revenue arising from contracts signed with offshore entities for providing information technology outsourcing (ITO), business processing outsourcing (BPO) and knowledge process outsourcing (KPO) services.
Those already taxed on offshore service outsourcing income since July 1 would be refunded within this year, the statement said.
China's service outsourcing industry posted a 21 percent year-on-year increase to 23.6 billion USD in 2009, according to a report by Deloitte last month.
Source: China View website
