Company system restructuring. The non-company system enterprises, in accordance with the provisions of the Company Law of the People's Republic of China, restructured to limited liability company or joint stock company as a whole, or limited liability company restructured to joint stock company as a whole, are exempted from deed tax, if the restructured company inherit the land and house ownerships of the former enterprise.

Corporate equity restructuring. In transfer of shares, where the units or individuals undertake the equities of the enterprise, and the land and house ownerships do not transfer, the deed tax is not imposed. Where the state-owned and collective enterprises implement the "joint stock cooperative system reorganization" in which the employees buy the properties of the enterprises, the enterprises transfer some properties to their employees, or the former enterprises are changed into joint-stock cooperative enterprises through their employees' investment and increase in investment, the deed taxes are exempted, if the reorganized joint-stock enterprises undertake the land and house ownerships of the former ones.

Merger of enterprises. Where two or more enterprises, in accordance with the provisions of the laws and the contract, are merged into and reorganized as one enterprise, the deed taxes are exempted, if the merged enterprise undertakes the land and house ownerships of the former ones.

Separation of enterprise. Where an enterprise, in accordance with the provisions of the laws and the contract, is separated into two or more enterprises with same investor, the deed taxes are not levied, if the derivative party and newly established party undertake the land and house ownerships of the former one.

Sale of enterprises. Where the state-owned and collective enterprises are sold, the legal persons of the sold enterprises are written off, and the vendees properly resettle over 30% employees of the former enterprises, half of their deed taxes are exempted, if the vendees undertake the land and house ownerships of the purchased ones; where the vendees resettle all of the employees of the former enterprises, the deed taxes are totally exempted.

Closure and bankruptcy of enterprises. After the enterprises implement closure and bankruptcy in accordance with relevant laws and regulations, the deed taxes are exempted, if the creditors (including the employees of the closed and bankrupt enterprises) inherit the land and house ownerships of the closed and bankrupt enterprises in order to cover the debt; half of the deed taxes are exempted, if the non-creditors inherit the land and house ownerships of the closed and bankrupt enterprises and property resettle over 30% employees of the former enterprises; and the deed taxes are totally exempted, if all the employees of the former enterprises are resettled.

Subsequent to M&A or majority holding of state-owned enterprises by the extra-territorial capital and private capital, where technical transfer is conducted and no more than RMB300,000 of net income is obtained from technology transfer-related consulting, technical services, and technical training during the technical transfer process, the corporate income taxes are temporarily exempted.

Subsequent to M&A or majority holding of state-owned enterprises by the extra-territorial capital and private capital, where enterprises invest in technology transformation projects in Jilin Province in line with the industry policies of the State, 40% of the investment for procurement of the domestic equipment needed for the projects can be offset from the newly added corporate income tax in the year when the equipment is purchased from the previous year. Where the newly added corporate income tax is insufficient for offset, the investment not offset can be continuously offset with the newly added corporate income tax in a future year when the equipment is purchased from the previous year, but limit should not be longer than 5 years.

Subsequent to M&A or majority holding of state-owned enterprises by the extra-territorial capital and private capital, where the expenses for R&D of new products, new technologies, and new technics in the profit-making years increase by over 10% (inclusive) from the previous year, 50% of the actual expenses are allowed to be offset the taxes payable in that year, besides listing based on the actual amount in accordance with the provisions.

Subsequent to M&A or majority holding of state-owned enterprises by the extra-territorial capital and private capital, the enterprises merged & acquired or majority held may continue to enjoy the preferential polities until expiration upon approval of the competent tax authority, where the tax relief periods of the enterprises before M&A or majority holding have not expired and the remaining periods are consistent. Where the tax relief periods of the enterprises before M&A or majority holding have not expired and the remaining periods are inconsistent, the corresponding taxable incomes shall be calculated respectively and the tax relief can still be enjoyed respectively until expiration in accordance with the provisions of the tax law.

The secondary sector units in the state-owned enterprises merged & acquired or majority held by extra-territorial capital and private capital shall pay the corporate income tax at the rate of 15%, if they are high-tech enterprises in the High-tech Industrial Development Zones approved by the State Council.

According to the spirit of the Reply of the State Taxation Administration on Exemption of Business Tax from Transfer of Enterprise Property (Guo Shui Han [2002] No. 165), transfer of enterprises property is exempted from business tax.

In case a new enterprise (registration for legal person is re-processed) is incorporated during the restructuring process by an enterprise implementing company system restructuring, for the part of capitals thereof recorded in the new book account and the capital increased due to establishment of capital ties, to which tax stamps have been affixed, no more stamps need to be affixed, while for the part to which tax stamps fail to be affixed and for the newly increased capital thereafter, tax stamps shall be affixed. In case a new enterprise is incorporated by way of merger or division, for the part of capitals thereof recorded in the new book account, to which tax stamps have been affixed, no more stamps need to be affixed. For the various kinds of taxable contracts signed before enterprise restructuring, but not fully performed, and the implementing subject needs to be changed after restructuring, the tax stamps have been affixed to those contracts only changed the implementing subject, with other terms remained unchanged, no more stamps need to be affixed. No stamps need to be affixed to the property transfer notes singed due to enterprise restructuring.

Where state-owned enterprises declare bankruptcy in accordance with relevant provisions of the Bankruptcy Law, the one-time settlement incomes that the employees obtained from the bankrupt enterprises are exempted from individual income taxes; for the one-time compensation incomes that the employees obtained from state-owned enterprises due to relieve of labor relations, the parts within the amount of three times of the local annual average wages in the previous year are exempted from individual income taxes.

If the non-share payment such as cash, portfolios and other assets in the total payment paid by the assignee to the assignor is not higher than 20% of the face value of shares paid (or the book value of the equity paid), upon approval of the competent tax authority, the assignor is temporarily allowed not to recognize and calculate the income or losses from the transfer of assets. In case that the assignor and assignee are not located in the same province (autonomous region or city under the direct control of the central government), the approval should be granted by the State Administration of Taxation. The merged enterprises also enjoy the abovementioned preferential policies.

¡ïWhere enterprises conduct liquidation or transfer wholly owned subsidiaries and companies whose over 95% of shares are held by the liquidated enterprises, the accumulated undistributed profits and accumulated reserves that the investors shall share shall be determined as income from dividend. For avoidance of double taxation of post-tax profits and of the influence on the corporate restructuring activities, the above-mentioned dividend income is allowed to be deducted from the transfer income, in the calculation of the investors' equity transfer gains.

¡ïThe losses of equity investment from redemption, assignment, or liquidation of the equity investment may be deducted before taxation; however, the deductible losses in every tax year shall not exceed the profits gained from equity investment and its transfer in the same year. The exceeding part may be carried forward and deducted in the following tax years.

¡ïhe income or loss from the transfer of assets is temporarily not confirmed by the transferor, the cost for the transferee to acquire the transferor's assets may be determined pursuant to the value confirmed in the appraisal, and no tax payment adjustment is needed.

¡ïWhere the state-owned enterprises reorganize and transfer all the property rights, the VAT is exempted from.

The losses of restructuring state-owned enterprises' current assets due to devaluation of assets evaluation, shall not belong to abnormal losses, if the current assets are not lost or damaged, and only the market changes, price becomes lower, and value magnitude reduces, shall not be transferred out as import tax amount

¡ïIf an enterprise's income of asset transfer or of debt restructuring confirmed as a result of paying off debts by non-case assets or of the creditor's concessions is of considerably large amount which accounts for 50% and above of the taxable income, and it is really difficult to pay the tax once-off, the tax may be evenly included in the payable income of each year within a period no longer than five tax years.

¡ïThe un-recovered operating losses of an enterprise prior to division shall be recovered year by year by all the enterprises after the division within the remaining period in light of the amount to be respectively borne by the enterprises after the division as stipulated in the division agreement, and the duration of recovery as prescribed in taxation regulations.

¡ïThe un-recovered operating losses due to merger of enterprises shall be handled respectively in light of different circumstances.

Where the merged enterprise continues to have the status as an independent taxpayer after the merger, its un-recovered operating losses prior to the merger shall be recovered year by year with its income in the subsequent years within the period prescribed in taxation regulations, and shall not be recovered with the income of the merging enterprise.

Where the merged enterprise does not have the status as an independent taxpayer after the merger, its un-recovered operating losses prior to the merger may be recovered year by year with the income of the merging enterprise in the subsequent years within the period prescribed in taxation regulations.

The operating losses of an enterprise under share right restructuring, which have not been recovered prior to the share right transfer, may be recovered year by year by the enterprise after the share right restructuring within the remaining period in light of the duration for recovery of losses as prescribed in taxation regulations.

Investment with part of the non-monetary assets of the enterprise, including the rationed purchase of stocks of a share-limited company by its shareholders having a legal personality with part of its non-monetary assets, as far as income tax is concerned, should involve two business transactions, namely, investment and sale of part of its non-monetary assets at their impartial value. The income or losses from the transfer of the assets shall be decided and calculated.

In the case of real difficulty in determining the income tax in a single tax year due to the large volume of the income from asset transfer, upon approval of the competent tax authority, the income may be treated as deferred income and carried forward and divided evenly in the duration of the investment and the following five tax years.

To reduce administrative charges for restructuring and reorganizing of state-owned enterprises

For restructuring and reorganizing enterprises, charges for items involving registration of business registration change, trademark registration change, tax registration, property rights and land registration, shall be implemented in accordance with the documents of (Cai Shui [2003] No. 184) and (Ji Jia Fei [1998] No. 1077).When conducting land registration, the land and resources administration departments, except charging fees for registration certificate, shall no longer charge survey and measurement registration fees or other fees, for the land completed the initial registration.

Half of the intermediary service charges collected for restructuring and reorganizing of state-owned enterprises

According to the actual situation of the province's business and economic development, the intermediary service charges for state-owned assets assessment, property assessment, land evaluation, finance, and audit in the process of restructuring and reorganizing of state-owned enterprises, no matter determined or guided by the government, are reduced to 50% according to the current standard.