Fujian’s Entertainment Industry to Enjoy Lower Business Tax Rates

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Aug. 1 – A majority of Fujian Province’s entertainment enterprises will be paying a lower amount of business tax starting from this month, thanks to a newly released provincial document that made adjustments to business tax rates for the region’s entertainment industry.

The General Office of the Fujian Provincial People’s Government issued the “Circular on the Adjustments to Business Tax Rates for Entertainment Industry (Minzhengban [2011] No.57)” on July 5. According to Circular No.57, starting from August 1, 2011, business tax rates will stand at 20 percent for cyber cafes and video game arcades, 10 percent for golf businesses and 5 percent for the rest of entertainment businesses.

The new document will bring a business tax reduction to most entertainment businesses. Before the circular took effect, business tax rates for Fujian’s entertainment industry were comprised of two levels of 5 percent and 20 percent. While only pool and bowling businesses enjoyed the lower business tax rate of 5 percent, the rest of the entertainment businesses were all subject to the higher rate of 20 percent, according to a report by the Fujian-based business paper Straits Financial Herald (Haixia Caijing Daobao).

The report also added the new tax policy will likely reduce a total tax burden of around RMB193 million during the tax year and bring prosperity to the local entertainment industry.

This article is also available on Dezan Shira & Associates’ online business resource library. To view the article, and other regulatory updates, please click here.

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