The Ministry of Finance and the State Administration of Taxation issues New Rules on Income Tax Treatment of Corporate Restructuring
On April 30 the Ministry of Finance and the State Administration of Taxation issues the Notice on Several Issues Concerning the Enterprise Income Tax Treatment of Corporate Restructuring (hereafter referred to as “Notice”) , which take effect from Jan 1 2009.
Corporate restructuring in the Notice is classified to six catalogues, namely change of legal form, debt restructuring, equity acquisition, asset acquisition, merger and division.
Depending on different situations, ordinary or special tax treatment shall be applied to corporate restructuring. The Notice stipulates specific conditions on which special tax treatment and crossborder restructuring can be recognized. Documents submission to local tax authority is required in the special tax treatment.