The State Administration of Taxation (SAT) and the Ministry of Finance (MOF) circulated Notice on Issues Relevant to Taxation Policies with Regards to Supporting Development of Comic and Animation Industry (the “Comic and Animation Tax Notice”) in July. According to the Comic and Animation Tax Notice, four categories of preferential tax policies are issued to promote Chinese comic industry:
- VAT: Before December 31, 2010, for comic and animation enterprises classified as general tax payers, after a 17 percent tax rate has been imposed on the sales revenue of self-developed comic and animation software, three percent tax rate is actually applied to the aforementioned taxable revenue. The excess over three percent will be refunded upon the payment.
- Enterprise Income Tax (EIT): The current preferential EIT policy on the encouragement of software industry may be applied for by comic and animation enterprises as long as their self-developed and produced comic and animation products are recognized by relevant authorities.
- Business Tax: Services involved in the development of comic and animation products such as image design, comic and animation production, dubbing and transcoding are subject to a reduced rate of three percent until December 31, 2010.
- Import Duties and Import VAT: Imported merchandises for self-developed and produced comic and animation products recognized by relevant authorities may enjoy tax exemption on import duties and import VAT.
- Notice on Issues Relevant to Taxation Policies with Regards to Supporting Development of Comic and Animation Industry
- Issuing Authority: State Administration of Taxation, Ministry of Finance
- Date of Issuance: July 17, 2009 / Effective Date: January 1, 2009