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Q:
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What is the document being referred to?
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A:
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Announcement on Tax Support Policies for the Film and Other Industries, issued by the Ministry of Finance and the State Administration of Taxation on 13 May 2020 and effective from 1 January 2020 (Announcement of the Ministry of Finance and the State Administration of Taxation No. 25 of 2020)
Announcement on Taxation Policies Relating to Supporting the Prevention and Control of Pneumonia Infected by New Coronavirus, issued by the Ministry of Finance and the State Administration of Taxation on 6 February 2020 and effective from 1 January 2020 (Announcement of the Ministry of Finance and the State Administration of Taxation No. 8 of 2020)
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Q:
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What are the difficult sectors that are currently affected by the epidemic, including which ones?
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A:
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The four major categories include transportation, catering, accommodation and tourism (referring to travel agencies and related services, and management of tourist attractions), with specific criteria for judgement in accordance with the current National Economic Classification of Industries. Enterprises in the film industry are limited to those in film production, distribution and projection.
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Q:
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How do I determine if I am in a difficult sector?
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A:
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Self-determination, based on the announcement.
Enterprises in the difficult industry must generate at least 50% of their total revenue (excluding non-taxable income and investment income) from their main business in 2020.
Enterprises in the film industry do not include those distributing films through information networks such as the Internet, telecommunications networks and radio and television networks.
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Q:
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How do I declare a difficult sector after it has been judged?
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A:
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The taxpayer should submit the Declaration on the Application of the Policy on the Extension of the Loss Carry Forward Period through the e-Taxation Bureau when settling the enterprise income tax remittance in 2020. The taxpayer should fill in three information in this declaration, namely the taxpayer's name, taxpayer identification number (unified social credit code) and the specific industry to which it belongs, and be responsible for the truthfulness, accuracy and completeness of the information such as its compliance with the policy provisions, the proportion of main business income meeting the requirements and the difficult industry to which it belongs ticked.
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Q:
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What are the concerns in the implementation of the policy?
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A:
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Only losses incurred in 2020 are allowed to be carried forward for eight years, while losses incurred in years prior to and after 2020 (excluding, as below) are still only allowed to be carried forward for five years.
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