According to State Taxation Administration of The People's Republic of China 1998757 and 1999788, domestic payment units sign contracts or agreements with foreign enterprises on loans, technology transfer and property leasing. And the interest, rent and royalties paid in accordance with the provisions of the contract or agreement have been included in the current cost of the domestic payment unit, regardless of whether the above funds have actually been paid, they are deemed to have been paid, and the income tax of foreign enterprises should be withheld and remitted in accordance with the provisions of the tax law. Among them, interest, rent, royalties and other payments that are not due or deferred according to the provisions of the contract are accrued and included in the current costs and expenses of the enterprise according to the relevant provisions of the accounting system, and deducted before tax. If the taxable income is calculated when the enterprise income tax return is submitted, it should also be regarded as the current costs and expenses, and the withholding income tax of foreign enterprises should be withheld and remitted when the financial withdrawal expenses are made.
Enterprise income tax is the income tax levied on the production and operation income and other income of Chinese enterprises and other organizations with income.
A resident enterprise shall pay enterprise income tax on its income from sources inside and outside China.
Where a non-resident enterprise establishes an institution or place in China, it shall pay enterprise income tax on the income obtained by its institution or place from China and the income generated outside China but actually related to its institution or place.
If a non-resident enterprise has no institution or place in China, or if it has an institution or place, but its income has no actual connection with its institution or place, it shall pay enterprise income tax on its income originating in China.
Principles for determining income from sources inside and outside China.
The income obtained by enterprises from various channels in monetary and non-monetary forms is the total income, including the following points:
1, sales revenue;
2. Income from providing labor services;
3. Income from property transfer;
4 dividends, bonuses and other equity investment income;
5. Interest income;
6. Rental income;
7. Royalty income;
8. Receiving donation income;
9. Other income.
Article 21 of the Enterprise Income Tax Law of People's Republic of China (PRC): When calculating the taxable income, if the enterprise's financial and accounting treatment methods are inconsistent with the provisions of tax laws and regulations, it shall be calculated in accordance with the provisions of tax laws and regulations.