China Aviation Law
6Oct/10Off

Aviation Business Between Mainland And Taiwan To Enjoy Exemption from Enterprise Income Tax

2010092900151

In a move to motivate tourist and business travel between Taiwan and China, the CAAC and the Ministry of Finance have announced policies to increase cross-straight traffic.

The CAAC announced that the it will increase the alloted slots to Taiwanese airlines.

The Taiwan Affairs Office of China's State Council announced earlier Wednesday the increase in the number of flights across the Taiwan Strait, including an additional 14 flights to Shanghai, four to Beijing, four to Shenzhen, 11 to Xiamen and Fuzhou, two to Qingdao and one to Changsha.

Source: http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aALL&ID=201009290015

Similarly, the Ministry of Finance has announced certain tax benefits to direct traffic. These benefits will include exemption on enterprise tax and certain retroactive tax benefits for airlines from June 2009.

According to this new rule, from 25 June 2009, incomes of Taiwan airline companies received in the Chinese Mainland from their direct aviation business between the Chinese Mainland and Taiwan shall be exempt from business tax. Any business tax that should not be collected but has already been paid by any Taiwan airline company from 25 June 2009 to the date of receiving this document shall offset its business tax payable afterwards; if the business tax that has been collected is more than the business tax payable for the remaining period within 2010, the excessive tax payment shall be refunded.

Source: http://blawg.lehmanlaw.com/wordpress/?p=626

For the text of the policy statement from the Ministry of Finance see: http://www.e-to-china.com/tariff_changes/Policy_Focus/2010/0928/86874.html

This is good news to an industry that has seen double digit over the last year.


Posted by Casey DuBose

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