The Ministry of Finance and State Administration of Taxation and the Ministry of Commerce jointly released in July 2010 Caishui No. 64, 2010 Notice that, from July 1, 2010 onwards, in 21 China service outsourcing model cities, incomes of offshore service outsourcing enterprises engaged in the business are exempted from business tax. The tax incentive contents include services in the form of information technology (IT) outsourcing, technical business process outsourcing and technical knowledge process outsourcing. It provided a preferential space for a number of service-oriented enterprises and foreign-invested enterprises. The deadline for tax breaks are tentatively scheduled at 2013.
Although the application process are friendly and applicable, due to different enterprise qualifications and industry conditions, application policies differ from area to area and have an higher demand in the submission of information, professional assistance are still in need.
Hwuason service contents:
- corresponding compliance review, revise and re-sign of offshore service outsourcing contracts
- official recordation of service contracts
- technical notes compilation or arrangement of service contracts
- income documents organization and imputation of offshore service outsourcing business
- official records of foreign exchange incomes
- to file and submit recordation materials
21 China service outsourcing model cities where the benefits can be enjoyed:
Beijing, Tianjin, Dalian, Harbin, Daqing, Shanghai, Nanjing, Suzhou, Wuxi, Hangzhou, Nanchang, Xiamen, Jinan, Wuhan, Changsha, Guangzhou, Shenzhen, Chonging, Chengdu, Xi’an
Outsourcing service business tax free scope
1. Information Technology Outsourcing (ITO)
1. Software developmenent and outsourcing
Classification |
Scope |
Software R&D and development services |
For Financial, government, education, manufacturing, retail, services, energy, logistic, transportation, media, telecommunications, public utitlities, health departments and enterprises, as the user’s operating/production/supply chain/customer relations/human resources and financial management, computer-aided design/engineering and other services for software development including custom software development, embedded software, packaged software development, system software development, software testing |
Software and technology services |
Software consulting, maintenance, training, testing and other technical services |
2. Service outsourcing of information technology R & D
classification |
Scope |
Integrated circuits and electronic circuit design |
Integrated circuits and electronic circuit design and related technical support services |
Test platform |
For software, integrated circuits and electronic circuits, to provide the test platform for the development of use |
3. Operation and maintenance of information systems outsourcing
classification |
Scope |
Information systems operations and maintenance services |
Customer’s internal information system integration, network management, desktop management and maintenance services, information engineering, geographic information systems, remote maintenance, information systems applications |
Based information technology services |
Integration of information technology based management platform, IT infrastructure management, data center, care center, security services, communication services and other basic information technology services |
2. Technical business process outsourcing services (BPO)
classification |
Scopes |
Business process design services |
To provide internal management to enterprises, human resources managements, finance, audit and tax, financial payment services, internal management of medical data and other data analysis operations, data mining, data management, data using services, professional data processing, analysis and integration services; |
Business operation services |
To provide to customers with technical research and development services, to provide for business, sales, products after-sale service by the application of customer analysis, database management and other services. Mainly include financial services, government and education services. Manufacturing and life sciences, retail and wholesale and transport operations, health care operations, communications and public utilities services, call center, e-commerce platforms. |
Enterprise chain management services |
To provide procurement, logistics of the overall program design and database services. |
3. Technical knowledge process outsourcing (KPO)
scope |
Intellectual property research, pharmaceutical and biotechnology R&D and testing, product research and development, industrial design, analytics and data mining, animation, gaming design and development, courseware development, engineering and other fields. |