o standardize taxation management, the State Bureau of Taxation issued on May 12, 2000 the Circular concerning Taxes for Enterprises with Foreign Investment and Foreign Enterprises Engaged in Consultation Business (Guo Shui Fa [2000] No.82), which regulates the taxation on incomes obtained by foreign-invested enterprises, representative offices and overseas consulting businesses from consulting activities in China.
1. Taxation on incomes obtained from consulting activities by enterprises with foreign investment and representative offices in
All the income from consultation business based on individual contracts between enterprises with foreign investment, or representative offices, with their customers (including those signed by a representative office on behalf of its head office, but actually fulfilled by the representative office) shall be entered as the income of the said enterprises or representative offices, and shall be reported for business and income taxes at the place where the said enterprises and representative offices are located.
2. Taxation on incomes obtained from consultation services provided to customers on individual basis by overseas consultative enterprises
All the income obtained by an overseas consultative business from consultation services that take place in
If all the consultation services take place outside of
3. Taxation on incomes from consultation business jointly conducted by overseas consultation companies and enterprises with foreign investment or representative offices in
When an overseas consultation company signs a contract and conducts consulting business jointly with a domestic foreign-invested enterprise or representative office in
In cases where the overseas enterprise sends personnel to China to participate in the said consultation business, its income share shall again be segmented according to places of occurrence into a domestic part, which should be no less than 50 percent of its total share and should be reported for business and income taxes in China.
From: http://english.china.com/zh_cn/business/faq/11024764/20041015/11917032.html