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Finance and tax news: Hainan Free Trade Port has many preferential policies for "substantial operati

2022-11-01

Hainan Free Trade Port has a lot of "substantial operation enterprises". What is "substantial operation of enterprises"? Three departments unite to make sure




According to the requirements of the Overall Plan for the Construction of Hainan Free Trade Port, the Ministry of Finance and the State Administration of Taxation issued the Notice on the Preferential Policies for Enterprise Income Tax of Hainan Free Trade Port (CS [2020] No. 31), putting forward the requirements for substantive operation. In March 2021, the State Administration of Taxation, Hainan Provincial Taxation Bureau, Hainan Provincial Department of Finance and Hainan Provincial Market Supervision and Administration jointly issued the Announcement on Issues Concerning the Substantive Operation of Enterprises in Encouraged Industries of Hainan Free Trade Port (No. 1 in 2021, hereinafter referred to as the Announcement), proposing the principle criteria for determining the substantive operation. The Supplementary Announcement defines the content of the Announcement in detail.




1. "Production and operation in the free trade port" means that the enterprise has a fixed production and operation site and necessary production and operation equipment and facilities in the free trade port, and the main production and operation location is in the free trade port, or the organization that implements substantial and comprehensive management and control of production and operation is in the free trade port; Conclude relevant contracts in the name of the Company.




2. "Personnel in the free trade port" means that the enterprise has employees who meet the needs of production and operation who actually work in the free trade port, and the wages and salaries of employees are paid through the bank account opened by the enterprise in the free trade port; According to the size of the enterprise and the situation of employees, at least 3 (including) to 30 (including) employees in a tax year must have lived in the Free Trade Port for 183 days in total.




3. Under any of the following circumstances, it shall be deemed that it does not conform to the substantive operation: (1) It does not have the production and operation function, but only undertakes the financial settlement, tax declaration, invoicing and other functions for the mainland business; (2) The registered address is inconsistent with the actual business address and cannot be contacted or the actual business address cannot be provided after contacting.










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Supplementary Announcement of the State Administration of Taxation, Hainan Provincial Taxation Bureau, Hainan Provincial Department of Finance, Hainan Provincial Market Supervision and Administration Bureau on Issues Related to the Substantive Operation of Encouraged Industrial Enterprises in Hainan Free Trade Port




State Administration of Taxation Hainan Provincial Taxation Bureau Hainan Provincial Finance Department Hainan Provincial Market Supervision Administration Announcement No. 5, 2022






With the approval of the People's Government of Hainan Province, The supplementary announcement to the Announcement of the State Administration of Taxation, Hainan Provincial Taxation Bureau, Hainan Provincial Department of Finance, Hainan Provincial Market Supervision and Administration Bureau on Issues Related to the Substantive Operation of Encouraged Industrial Enterprises in Hainan Free Trade Port (No. 1 in 2021, hereinafter referred to as the Announcement) is as follows:




1、 The "production and operation in the free trade port" mentioned in Article 2 of the Announcement refers to that the enterprise has a fixed production and operation site and necessary production and operation equipment and facilities in the free trade port, and the main production and operation location is in the free trade port, or the organization that implements substantial and comprehensive management and control of production and operation is in the free trade port; Conclude relevant contracts in the name of the Company.




2、 The term "personnel in the free trade port" as mentioned in Article 2 of the Announcement refers to the fact that the enterprise has employees who meet the needs of production and operation who actually work in the free trade port, and the wages and salaries of employees are paid through the bank account opened by the enterprise in the free trade port; According to the size of the enterprise and the situation of employees, at least 3 (including) to 30 (including) employees in a tax year must have lived in the Free Trade Port for 183 days in total.




3、 The term "accounting in the free trade port" as mentioned in Article 2 of the Announcement refers to that the enterprise's accounting documents, accounting books, financial statements and other accounting files are stored in the free trade port, and the basic deposit accounts and bank accounts for main business settlement are opened in the free trade port.




4、 In case of any of the following circumstances, it shall be deemed that the operation does not conform to the substantive requirements:




(1) It has no production and operation function and only undertakes the functions of financial settlement, tax declaration, invoice issuance, etc. for mainland businesses;




(2) The registered address is inconsistent with the actual business address and cannot be contacted or the actual business address cannot be provided after contacting.




5、 The substantive operation of enterprises or units that hold posts, are employed and operate by high-end and scarce talents who enjoy preferential personal income tax policies of the free trade port as stipulated in the Interim Measures for the Administration of the List of High end and Scarce Talents Who Enjoy Preferential Personal Income Tax Policies in Hainan Free Trade Port (Qiongfu [2022] No. 31) shall be implemented with reference to the provisions of this Proclamation.




6、 Enterprises that enjoy preferential policies for enterprise income tax in the encouraged industries of the Free Trade Port operate substantively, and adopt the management mode of "self judgment, declaration commitment and post verification". The enterprise shall make a commitment to the substantive operation during the annual final settlement and fill in the Substantial Operation Self Assessment Commitment Form. The enterprise shall be responsible for the authenticity, accuracy and completeness of the tax declaration materials and relevant supporting materials.




7、 The provincial taxation bureau, the provincial finance department, the provincial market supervision and administration bureau and other departments jointly established the substantive operation joint verification mechanism (hereinafter referred to as the "joint working mechanism"). The joint working mechanism and the competent tax authority will conduct a "full coverage" check on the enterprises newly added in the current year that enjoy the preferential policies for enterprise income tax in the encouraged industries of the Free Trade Port and the enterprises or units of high-end and scarce talents that enjoy the preferential policies for individual income tax in the Free Trade Port; The enterprises or units in stock shall be spot checked according to a certain proportion.




8、 If there is any dispute over the determination of the substantive operation of the enterprise, the provincial market supervision and administration bureau shall take the lead to establish a dispute coordination and settlement mechanism with the provincial finance department, provincial tax bureau and other departments, and study and determine.




9、 This announcement shall be implemented from January 1, 2023 to December 31, 2024.




It is hereby announced.

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