In the recently released notice, the State Administration of Taxation clarified that the preferential deferred taxation policy is applicable to four kinds of the intra-group equity or assets transfer at the net book value between the corporate groups and citizens, under which the gains of the equity or assets transfer cannot be confirmed. This policy is to offer further support for enterprises to integrate resources and grow bigger and stronger.

 

The notice provides that the four kinds of equity or assets transfer, including transfer from the parent company to its subsidiaries, from a subsidiary to the parent company or the other subsidiaries, can enjoy the deferred taxation treatment. This preference can significantly ease the taxation pressures of companies and reduce the financing costs, and will facilitate the business restructuring of the corporate groups, accelerate the state-owned enterprises’ reform process and enable them to actively participate in the market competition.

 

This policy is not only applicable to the state-owned corporate groups, but also the other corporate groups. It can ensure the market players of different ownership to make fair competition under the same taxation environment and guide the non-public economy to develop healthily.

 

Source: Nanfang Daily, June 4, 2015