The Regulations Governing Application of Investment Tax Credits to Private Institutions Participating in Public Infrastructure Projects
The terms as used in these Regulations shall be defined as follows:
1.“Credit against profit-seeking enterprise income tax payable for the current year” shall mean credit against tax payable calculated by multiplying the applicable tax rate by profit-seeking enterprise taxable income for the current year as determined by the tax collection authority, and credit against additional tax payable calculated by applying 10% on the undistributed earnings for the previous year as determined by the tax collection authority.
2.“Equipment or technology” shall mean equipment or technology for construction or operation, and equipment or technology for pollution control.
3.“Equipment for construction or operation”:
i.“Equipment for construction” shall mean the equipment specified for use in the construction of major infrastructure projects.
ii.“Equipment for operation” shall mean equipment and primary buildings of major infrastructure projects required for rendering services provided by the projects.
4.“Technology for construction or operation” shall mean that which satisfies one of the following requirements:
i. Patents or know-how used for equipment for construction or operation under the preceding subparagraph.
ii.Know-how or package software required for computer-aided design or management.
5.“Equipment for pollution control” shall mean equipment required to process, detect or monitor pollution sources or waste discharged or recycled in the course of sorting, distributing, or operating process to comply with acts or regulations governing environmental protection, including equipment or civil engineering facilities used for air pollution control, noise and vibration control, water pollution control, soil and ground water pollution control, waste disposal or recycling, environmental detection or monitoring.
6.“Technology for pollution control” shall mean patents or know-how exclusively used for the equipment under the preceding subparagraph.
7.“The current year” shall mean the year in which equipment or technology is delivered, or the year in which the payment for research and development and personnel training is made.
8.“Purchase” shall mean where a private institution participating in a major infrastructure project acquires equipment or technology through buying from others, or by manufacturing or constructing such equipment or technology itself or others.
9.“Cost of purchase”:
i.In the case of buying from others, the term shall mean the prices of equipment or technology, inclusive of transportation fee and insurance fee, but excluding any other fee paid for acquisition of such equipment or technology.
ii.In the case of manufacturing by itself, the term shall mean the actual cost incurred in producing such equipment or technology.
iii.In the case of manufacturing by others, the term shall mean the actual prices paid by the private institution for the production of the equipment or technology by others, inclusive of transportation fee and insurance fee；manufacturer who bears partial production cost by himself is also included, but excluding any other fee paid for acquisition of such equipment or technology.
iv.In the case of constructing by itself, the term shall mean the actual cost incurred in constructing the primary buildings of the projects, inclusive of the cost of labor or materials and the expenses incurred in designing, manufacture, construction, and installation necessary to make such buildings fit for use in the operation of business.
v. In the case of constructing by others, the term shall mean the actual construction cost, inclusive of the prices of the construction and the amount of the capitalized interests for the projects of consignors.