Loss remediation: the loss carry-forward period for enterprises in difficulty and film enterprises has been extended to 8 years

(1) Article 4 of the Announcement on Tax Policies Relating to Supporting the Prevention and Control of the Pneumonia Epidemic Infected by a New Type of Coronavirus, Announcement of the Ministry of Finance and the State Administration of Taxation, No. 8 of 2020, stipulates that: for the losses incurred in 2020 by enterprises of the industry in difficulty that are greatly affected by the epidemic, the maximum carry-forward period has been extended from 5 years to 8 years. to 8 years. Enterprises in difficult industries, including the four major categories of transportation, catering, accommodation and tourism (referring to the two categories of travel agencies and related services, and the management of excursion scenic spots), are judged in accordance with the current National Economic Industry Classification. The main business income of enterprises in difficult industries for the year 2020 must account for more than 50% of the total income (excluding non-taxable income and investment income). Taxpayers should judge for themselves whether they belong to enterprises in difficult industries and the percentage of main business income meets the requirements.

(2) In order to support the development of the movie and other industries, Article 2 of the Announcement on Tax and Fee Support Policies for the Movie and Other Industries (Announcement of the Ministry of Finance and the State Administration of Taxation No. 25 of 2020) makes it clear that for losses incurred by enterprises in the movie industry in the year 2020, the maximum number of years for carrying forward losses is extended from 5 years to 8 years. Film projection service refers to the film audio-visual services provided to the audience by units holding the Film Projection Business License using professional cinema projection equipment. Enterprises in the film industry are limited to those engaged in film production, distribution and projection, excluding those that disseminate films through information networks such as the Internet, telecommunication networks and radio and television networks.