CHINA Law and Practice Contributed by: Nancy Zhang, Xiaoying Tian, Qian Gu and Liangqian Ying, JunHe LLP
8.5 Tax Benefits According to the PRC Enterprise Income Tax Law, real estate held by a company is typically treated as fixed assets, which may be depreci - ated, and the relevant depreciation amounts are allowed to be deducted from taxable income. The land use right held by companies is usually treated as a non-tangible asset, which may be amortised, and the relevant amortised amount may be deducted from taxable income.
• withholding income tax at an applicable rate of 10% on the net income generated from the transfer of equity in such onshore project company, if under each circumstance such offshore entity has no establishment in the PRC or such income has no actual connec - tion with such establishment, unless other - wise provided in a more preferential bilateral tax treaty. In the case of an offshore entity directly holding real estate in the PRC, which existed before July 2006, such foreign investor, if it has no estab - lishment in the PRC or the income generated in the PRC has no actual connection with such establishment, is subject to: • withholding income tax on the net income generated from the transfer of the real estate at a rate of 10%; and • withholding income tax at a rate of 10% on the rental proceeds generated by the real estate.
299 CHAMBERS.COM
Powered by FlippingBook