Administration of Taxation on Non-Resident Project Contracting and Labor Service

On January 20, 2009, the State Administration of Taxation promulgated the Tentative Measures for the Administration of Taxation on Non-Resident Project Contracting and Labor Service (the "Measures"), effective March 1, 2009. The Measures apply to non-resident enterprises and individuals undertaking contracted projects and providing labor services in China. The Measures mainly focus on administrative issues regarding tax registration and declaration obligations of the non-resident enterprises and individuals, and collection and tracking management responsibilities of tax authorities. According to the Measures, non-resident enterprises engaging in contracted projects or providing labor services should go through tax registration procedures with competent tax authorities within 30 days after the signing of relevant agreements. In addition, the Measures specify the procedural and documentation requirements for tax declaration by non-resident enterprises, individuals and management, and supervision of collection of enterprise income tax, business tax and value-added tax.

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