On August 20, 2014, the National Development and Reform Commission released the long-awaited Catalogue of Encouraged Industries in the Western Region (“Western Catalogue”). The Catalogue took effect on October 1, 2014.
As background, in July 2011, China issued a circular granting any enterprise with operations located in the western region of China a reduced 15 percent EIT rate from January 1, 2011 to December 31, 2020 if the enterprise’s main business (i) is in an “encouraged industry” as provided in the Western Catalogue and (ii) generates more than 70 percent of the enterprise’s total revenue. As the Western Catalogue with the list of encouraged industries was released three years after the opening of reduced EIT eligibility, enterprises were deemed eligible as an encouraged industry for the reduced EIT rate according to three state-level industry catalogues (“Old Catalogues”) as provided in the SAT Bulletin  No. 12 (“Bulletin 12”).
Any enterprise that has been enjoying the 15 percent reduced EIT rate according to the Old Catalogues should re-examine its eligibility as of October 1, 2014 under the Western Catalogue.