In order to fully implement the scientific view of development in depth, and further improve the quality and efficiency of the collection and management of enterprise income taxes, we hereby notify you of the issues on adjusting the scope of collection and management of income taxes on enterprises which are newly established after 2009 as follows upon the approval of the State Council:
I. Basic Provisions
Taking 2008 as a base year, the enterprise income taxpayers which are administered respectively by state taxation bureaus and local taxation bureaus before the end of 2008 shall not be adjusted. Among the enterprise income taxpayers newly established after 2009, the enterprise income taxes on the enterprises which shall pay the value-added tax shall be administered by the state taxation bureaus; while the enterprise income taxes on the enterprises which shall pay the business tax shall be administered by the local taxation bureaus.
Simultaneously, from 2009 on, the following provisions shall apply to the scope of collection and management of income taxes on the following enterprises newly established:
i. For enterprises whose enterprise income taxes shall all belong to the Central Government, or enterprises which shall pay the business tax at the state taxation bureaus, their enterprise income taxes shall be administered by the state taxation bureaus.
ii. The enterprise income taxes on banks (credit cooperatives) and insurance companies shall be administered by the state taxation bureaus, and the enterprise income taxes on other kinds of financial enterprises except those as prescribed in the aforesaid provisions shall be administered by the local taxation bureaus.
iii. The enterprise income taxes of foreign-funded enterprises and permanent representative offices of foreign enterprises shall still be administered by the state taxation bureaus.
II. Provisions for Some Specific Issues
i.. When a domestic entity or an individual pays the income as prescribed in Article 3/ Paragraph 3 of the Enterprise Income Tax Law of the People’s Republic of China to a non-resident enterprise, the competent state taxation bureau or the competent local taxation bureau of enterprise income taxes on the domestic entity or individual who has paid this income shall respectively be responsible for the collection and management of the payable enterprise income tax on this income.
ii. For a branch newly established after 2009 by an enterprise on the basis of consolidation of trans-regional business operations established before the end of 2008, the department for the collection and management of enterprise income tax of the branch shall be in line with the department for the collection and management of enterprise income tax of headquarter. For an enterprise on the basis of consolidation of trans-regional business operations newly established after 2009, its headquarter shall divide the tax collection and administration power under the principles determined according to its basic regulations, the department for the collection and management of enterprise income tax of the branch shall be in line with the department for the collection and management of enterprise income tax of the headquarter.
iii. The management and administration on the enterprise income taxes of an enterprise, which was exempted from the turnover tax according to the tax law, shall be determined in light of the turnover tax category from which the enterprise is exempted; the enterprise income tax on an enterprise which pays neither value-added tax nor the business tax shall be administered by local taxation bureau temporarily.
iv. The management and administration on an enterprise which pays both value-added tax and the business tax shall in principle be determined on the basis of payable turnover tax category of its main business declared by itself when handling the tax registration; where the main business can not be determined in the tax registration formalities, the first business indicated in the industrial and commercial register shall be taken as the main business, once determined, it shall not be adjusted in principle.
v. Enterprises newly established after 2009 refer to the enterprises which were established in accordance with Circular of the Ministry of Finance and the State Administration of Taxation on the Standards for Determining the Newly-established Enterprises that May Enjoy the Preferential Policies for the Enterprise Income Tax (Cai Shui  No. 1) and standards for determining the newly-established enterprises.
III. State taxation bureau and the local taxation bureau in each region shall intensify communication and coordination, investigate and solve the new problems encountered in the implementation in time, and ensure the proper implementation of adjustment plan concerning collection scope under the principles of preventing tax evasion and without imposing extra burden upon taxpayers.
This Notice shall come into force as of January 1, 2009.
State Administration of Taxation
December 16, 2009