[Description]

1. If an overseas-registered Chinese-capital controlled enterprise ("OCCE") fits the descriptions of being a resident enterprise, it shall file an application for ascertainment of resident status to the tax authority at the place where its main investor in China is registered. The competent tax authority should conduct a preliminary assessment of the enterprise's resident status before further submitting the application level by level to the provincial tax authority for confirmation. Such confirmation, after being made by the provincial tax authority, will be communicated to other investment related provincial tax authorities.

2. If an OCCE concurrently fits the following descriptions, it should be identified as a resident enterprise with its effective management located in China ("overseas-registered resident enterprise" or "ORE"), and be subject to corresponding tax administration and to enterprise income tax on income derived from sources inside and outside of China.

(1) The places where the senior management personnel and relevant departments in charge of the daily production, operation and management of the enterprise perform their duties are mainly located in China.

(2) Financial decisions (for example borrowing, lending, financing and financial risk management) and human resources decisions (for example appointment, dismissal and remuneration) are made or required to be approved by any establishments or persons located in China.

(3) The main assets, accounting books, official seals, and minutes of board/shareholder meetings of the enterprise are located or preserved in China.

(4) 1/2 or more of the directors having voting rights or senior management personnel of the enterprise habitually reside in China.

3. The principal of substance over form should be used for the judgement on effective management. An OCCE should conduct a self-assessment to determine if its effective management is located in China based on its actual production, operation and management.

4. Where the place of effective management of an ORE is not where its main investor in China is domiciled, the ORE falls under the jurisdiction of the state tax authority at the place of effective management; or it may also elect to fall under the jurisdiction of the tax authority in charge of levying the corporate income tax of its main investor in China, upon approval of such tax authorities' common superior.

In case of multiple places of effective management for an ORE, the relevant tax authorities shall report such circumstance to their common superior for determination.

5. The tax authority in charge of an ORE, once confirmed, shall not be altered arbitrarily, and if alteration is indeed necessary, approval by a competent provincial authority shall be obtained.

[Materials Required]