I. General enterprises
Article 18 of the Enterprise Income Tax Law of People's Republic of China (PRC) (No.63, Presidential Decree, 2007) stipulates that the losses incurred in an enterprise's tax year may be carried forward to the following year to be made up with the income from the following year, but the longest carrying-forward period shall not exceed five years.
Two, high-tech enterprises and small and medium-sized technology enterprises
In order to implement the innovation-driven development strategy, the Ministry of Finance and State Taxation Administration of The People's Republic of China have issued a series of corporate income tax policies to support scientific and technological innovation and help innovation and entrepreneurship. The Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Extending the Period of Loss Carry-over of High-tech Enterprises and High-tech Small and Medium-sized Enterprises (Cai Shui [20 18] No.76) stipulates that as of the date of 20 1 8,1,an enterprise with the qualification of high-tech enterprises or high-tech small and medium-sized enterprises in that year (hereinafter collectively referred to as qualification) has a qualification of 5.
In order to accurately understand the "uncompensated losses in the first five years of the qualified year" stipulated in the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Extending the Carry-over Period of Losses of High-tech Enterprises and High-tech SMEs, and the Announcement of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on Issues Related to Enterprise Income Tax Treatment on Extending the Carry-over Period of Losses (State Taxation Administration of The People's Republic of China Announcement No.45, 20 18) clearly 1), the qualification means that high-tech enterprises have obtained according to it. Small and medium-sized scientific and technological enterprises shall determine their qualified year according to the year indicated in the warehousing registration number of small and medium-sized scientific and technological enterprises they have obtained. 2) Unrecovered losses in the first five years of a qualified year refer to the unrecovered losses in the first five years of a qualified enterprise in that year, regardless of whether it is qualified or not.
Third, enterprises in difficult industries that are greatly affected by the epidemic.
In order to do a good job in the prevention and control of novel coronavirus and support the development of related enterprises, on February 6, 2020, the Ministry of Finance and State Taxation Administration of The People's Republic of China jointly issued the Announcement on Tax Policies Related to Prevention and Control of novel coronavirus (Announcement No.8 of People's Republic of China (PRC) Ministry of Finance and State Taxation Administration of The People's Republic of China in 2020), which clearly pointed out that the longest carry-over period of losses incurred by enterprises in difficult industries that are greatly affected by the epidemic in 2020 will be extended from 5 years to 8 years. The enterprises in difficult industries mentioned in the announcement include transportation, catering, accommodation and tourism (referring to travel agencies and related services, and scenic spot management). The specific judgment standard is implemented according to the current classification of national economy industries. The main business income of enterprises in difficult industries in 2020 must account for more than 50% of the total income (excluding non-tax income and investment income).
Fourth, special matters
(A) the merger and division of enterprises
The Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Several Issues Concerning the Treatment of Enterprise Income Tax in Enterprise Restructuring Business (Caishui [2009] No.59) stipulates that the related income tax matters before the merger of the merged enterprise shall be inherited by the merged enterprise, and the losses of the separated enterprise within the statutory compensation period shall be made up by the separated enterprise.
The Announcement of State Taxation Administration of The People's Republic of China on the Treatment of Enterprise Income Tax for High-tech Enterprises and Small and Medium-sized Technology Enterprises in Extending the Period of Loss Carry-over and Compensation (State Taxation Administration of The People's Republic of China Announcement No.45, No.2018) clarified the above reorganization matters:
1. The carry-over period for the merged enterprise to inherit the uncompensated losses of the merged enterprise shall be determined according to the carry-over period for the losses of the merged enterprise;
2. The carry-over period of the losses that have not been made up by the separated enterprise shall be determined according to the carry-over period of the losses of the separated enterprise;
3. If the merged enterprise or the separated enterprise meets the requirements, it shall inherit the carry-over period of the losses that have not been made up by the merged enterprise or the separated enterprise. According to "since 20 18 1, enterprises that obtained the qualification of high-tech enterprises or small and medium-sized technology enterprises in that year (hereinafter collectively referred to as qualifications) are allowed to carry forward the losses that have not been made up in the first five years of the qualification year to make up for them in the following years. Deal with it.
(2) Policy repositioning
Article 21 of the Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Issuing Announcement (People's Republic of China (PRC) State Taxation Administration of The People's Republic of China Announcement No.40,2012) clearly points out that if an enterprise has an uncompensated loss in the previous year and stops production and business due to relocation and has no income, the year after the relocation year to the year before the completion of relocation can be regarded as the year of stopping production and business activities, which can be deducted from the legal loss carry-over compensation period; If the enterprise moves and produces at the same time, its losses shall continue to be calculated in the carry-over year.
In addition, it is particularly noted that the maximum relocation period given to enterprises in the above announcement is five years. Because the completion period of enterprise relocation (the year when the relocation is completed in any year within five years or the year when the relocation is completed for five years) is different, the longest loss recovery period is between 5- 15 years.