According to the report, Ministry of Finance, China General Administration of Customs and the State Tax Administration issued a joint notice the other day that in order to push ahead the experimental work for the reform of cultural system several policies for supporting the cultural development have been published, of which the newly-established cultural units are exempted from handing in income taxes for three years as encouraged by the government.

As defined in the notice, the newly-run cultural enterprises refer to those registered after 1 January 2004, namely the cultural units started from scratch while the cultural units which came into being by way of separation, reorganization, transfer and mergence and name-change of the original cultural units can not be considered as newly-run cultural enterprises.

The notice also made it clear that the other eight policies for providing favorable tax treatment include: The cultural enterprises at the core of the experimental cultural group having 100 percent investment and holding of the member enterprises may hand in, with the approval, enterprise-income taxes after putting them together; The export of the cultural products can enjoy the privilege of drawback (exemption of tax) in line with the policy; Those running cultural services overseas and obtaining revenue there are exempted from levying turnover taxes, and free from enterprise income taxes; In regard of imported equipment and accessory parts and reserve that are for self use and for production of key cultural products, import duties and import value-added taxes are exempted according to the rules; For those cultural units suffering losses from calamities of force majeure or incurred from taking up tasks assigned by the state, taxes of land-use for business and property taxes of the house properties in cities and towns are freed after approval; For those cultural units engaged in research and development , production and dissemination of digital broadcasting, movie and visual works, databank and electronic publications and so on they can enjoy the relevant uniformed favorable tax treatment if they are up to the standard as rules have it. The revenues obtained through sales of movie-copies by those film-making studios set up after the approval of the State Council and the movie-group and its member enterprises established after the approval by departments in administration of the broadcasting and TV and movie under the State Council are exempted from levying value-added taxes; For the revenue gained by film releasing enterprises from the film-show units it is free of the turnover taxes.

The notice pointed out, the cultural industry refers to the press and publication, broadcasting, TV and movie, culture and art business; The cultural units refer to the enterprises or institutions engaged in the press and publication, broadcasting, TV and movie, and culture and art business. The aforesaid policy can be applied for those units engaged in the experimentation for the reform of cultural system within the experimental area and the experimental units outside the experimental areas. The policy execution period lasts from January 1, 2004 to December 31, 2008. 
 

Source: People's Daily Online