Implementation Opinions of the Shanghai Municipal Office of the State Administration of Taxation and the Shanghai Municipal Bureau of Local Taxation on the Application for the Special Tax Treatment for the Transfer of Assets (Equities) of Enterprises

· Document Number：Letter No. 11 [2016] of the Shanghai Municipal Office of the State Administration of Taxation

· Area of Law： Taxation

· Level of Authority： Local Regulatory Documents

· Date issued：02-04-2016

· Effective Date：02-04-2016

· Status： Effective

· Issuing Authority： Shanghai Municipal Office, State Administration of Taxation Shanghai Local Taxation Bureau

Implementation Opinions of the Shanghai Municipal Office of the State Administration of Taxation and the Shanghai Municipal Bureau of Local Taxation on the Application for the Special Tax Treatment for the Transfer of Assets (Equities) of Enterprises
(Letter No. 11 [2016] of the Shanghai Municipal Office of the State Administration of Taxation)
The taxation bureaus of all districts and counties; and the No. 3 Sub-Bureau of the Shanghai Municipal Office of the State Administration of Taxation and the Shanghai Municipal Bureau of Local Taxation:
In accordance with the Enterprise Income Tax Law of the People's Republic of China, the Notice of the Ministry of Finance and the State Administration of Taxation on Issues concerning the Enterprise Income Tax Treatment for Promoting Enterprise Restructuring (No. 109 [2014], Ministry of Finance), the Announcement of the State Administration of Taxation on Issues concerning the Collection and Administration of Enterprise Income Tax on Asset (Equity) Transfer (Announcement No. 40 [2015], SAT) and other relevant documents, for the purpose of effectively handling the application for the special tax treatment for the transfer of assets (equities) of enterprises in Shanghai, the following implementation opinions are hereby offered to you in light of the actual circumstances of Shanghai Municipality for your implementation.
1. For the Application Form for the Special Tax Treatment for the Transfer of Assets (Equities) of Resident Enterprises (see Annex 2 for details) and the application materials (see Annex 1 for details) submitted by an enterprise, a taxation sub-bureau shall accept them within a prescribed time, and send to the enterprise the Application Form for the Special Tax Treatment for the Transfer of Assets (Equities) of Resident Enterprises submitted by the enterprise as affixed with the acceptance seal of the tax authority and a Written Notification (see Annex 3 for details).
If a taxation sub-bureau finds that the materials submitted by an enterprise are not complete upon receiving the enterprise's application, it shall not accept the application.
II. All taxation sub-bureaus shall, from the date when the transfer of the enterprises' assets (equities) is completed, organize a team of experts to conduct a risk screening on the matters concerning the special tax treatment for the transfer of the enterprises' assets (equities) every year based on the tax returns of the enterprises, recordation materials, other information on the administration of tax collection, and tax-related information on third parties. For enterprises with risks, all tax authorities shall verify the special tax treatment matters for the transfer of the enterprises' assets (equities) through inspection, tax payment appraisal and other follow-up administration methods. The risk response departments shall send the verification results to the administrative departments of income tax, and risk verification guidelines shall be developed by the Shanghai Municipal Office of the State Administration of Taxation and the Shanghai Municipal Bureau of Local Taxation at appropriate time.
Where a taxation sub-bureau conducts an on-site verification on an enterprise, the taxation sub-bureau shall check the materials retained for future reference (seed Annex 5 for details) by the enterprise. Where an enterprise fails to retain materials for future reference as legally required, the taxation sub-bureau shall punish it in accordance with the provisions of the relevant clauses of the Law of the People's Republic of China on the Administration of Tax Collection.
III. All taxation sub-bureaus shall, within 20 days after the conclusion of the annual final settlement and payment of enterprises, submit a report on the application for special tax treatment and the Statistics Form on the Application for the Special Tax Treatment for the Transfer of Assets (Equities) of Enterprises (see Annex 6 for details) to the Shanghai Municipal Office of the State Administration of Taxation and the Shanghai Municipal Bureau of Local Taxation (Income Tax Division).
Annex: 1. Operating Procedures for the Matters on the Application for the Special Tax Treatment for the Transfer of Assets (Equities) of Enterprises in Shanghai Municipality
2. Application Form for the Special Tax Treatment for the Transfer of Assets (Equities) of Resident Enterprises
3. Written Notification
4. Letter of Commitment for the Special Tax Treatment for the Transfer of Assets (Equities)
5. Materials Retained for Future Reference on the Special Tax Treatment for the Transfer of Assets (Equities) of Enterprises in Shanghai Municipality
6. Statistics Form on the Application for the Special Tax Treatment for the Transfer of Assets (Equities) of Enterprises
Shanghai Municipal Office of the State Administration of Taxation
Shanghai Municipal Bureau of Local Taxation
February 4, 2016