Jan. 19 – As part of its support for emerging cultural industries, China’s Ministry of Finance and State Administration of Taxation recently announced their intentions to continue the favorable value-added tax (VAT) and business tax (BT) treatment to the animation industry.
According to the “Circular on VAT and BT Policies that Support the Development of the Animation Industry (caishui  No.119)” released on December 27, 2011, qualified animation developers can enjoy a VAT refund and a reduced BT rate.
For an animation enterprise that is a VAT general taxpayer and sells self-developed animation software, VAT shall be charged at the rate of 17 percent, but the part of VAT that exceeds 3 percent of the taxpayer’s actual tax burden shall be refunded upon collection.
In addition, the export of animation software shall be exempt from VAT.
In order to gain eligibility for the favorable VAT treatment, the aforementioned animation software products shall meet the qualifications specified in the “Circular on VAT Policies for Software Products (caishui  No.100).”
For the following services provided by an animation enterprise for animation product development, BT shall be charged at a reduced rate of 3 percent:
An animation enterprise’s revenue from domestic animation copyright transfer (including the authorization and re-authorization of the animation brand, image or content) shall also be subject to BT at a reduced rate of 3 percent.
The recognition of the aforementioned self-developed and self-produced animation products by animation enterprises shall be implemented in accordance with the “Administrative Method on Animation Enterprise Recognition (wenshifa  No.51).”
The tax incentives in the new Circular stay effective between January 1, 2011 and December 31, 2012.
Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China, Hong Kong, India, Singapore and Vietnam. The firm specializes in assisting foreign enterprises with their tax obligations. For further advice and specifics relating to these recent measures, please email firstname.lastname@example.org, visit www.dezshira.com, or download the firm’s brochure here.
The China Tax Guide (Fifth Edition)
This popular book, fully updated with all recent tax changes and amendments, details all taxes in China affecting businesses and individuals, how to calculate the amounts due, tax registration and filing procedures, tax minimization techniques, and claiming VAT rebates. It also details good financial management techniques, handling negotiations with the tax bureau and annual audit and compliance procedures.
China to Offer Incentives to Its High-Tech, Cultural Industries
China’s Software Developers Can Enjoy VAT Refunds
Last Call for Tax Exemption of Cultural Enterprises in China
Beijing Plans RMB50 Billion Animation City
China to Ease FDI Threshold in Culture Industry
Previous Article « China Sets New Greenhouse Gas Emission Reduction Goals
Next Article Guangzhou Simplifies Electronic VAT Declaration Procedures »
Dezan Shira & Associates´ brochure offers a comprehensive overview of the services provided by the firm. With its team of lawyers, tax experts, auditors and...
A firm understanding of China’s laws and regulations related to human resources and payroll management is absolutely necessary for foreign businesses in...
Doing Business in China 2022 is designed to introduce the fundamentals of investing in China. Compiled by the professionals at Dezan Shira & Associates in...
With the scope and penalties of China’s social credit system being further clarified in 2021, legal and regulatory compliance has become more important than...
As a legitimate tool for reasonable tax planning and cost saving, tax incentives play an important role. Companies also use tax incentives as a useful...
Over the last few months, China has been quickly expanding the pilot program on electronic special value-added tax (VAT) fapiao (hereafter special VAT...
Dezan Shira & Associates helps
businesses establish, maintain,
and grow their operations.
Stay Ahead of the curve in Emerging Asia. Our subscription service offers regular regulatory updates,
including the most recent legal, tax and accounting changes that affect your business.