The State Administration of Taxation issued a document “About the approval of Dealing with the Taxes for foreign-invested enterprises and foreign enterprises obtaining government subsidies” in 2010. (This file focuses on the regulations of dealing methods of the taxes.)

This document covers the issues that any foreign-invested enterprises obtained freely from assets of monetary or non-monetary assets belong to the ranges, which depends on the laws, administrative regulations and the provisions of the State Council exempted from corporate income tax. The enterprises also deal with their assets from the government in the same way as with the investment assets, which are not included in the taxable income amount.

In addition, all government assets are owned by the enterprises in non-current assets or current assets, which according to the conditions of the government subsidies, belongs to the assets of buying, building and improving. The amount of government subsidies won’t account for the profit and loss of current business charged, but the government subsidies for the purchase and the formation of assets, this is reduced by the amount of government subsidies after the value of the costs of depreciation or amortization. But dealing with the assets from buying or formed by the government assets; the government subsidies will be reduced after the value of the costs of depreciation or amortization.