We summarise hereunder some further notable changes under Circular 151:
1. Corporate Income Tax (“CIT”)
• Circular 151 keeps affirming that staff welfare expenses directly incurred on employees shall be deductible at the cap of actual average monthly salary for a tax year. The average monthly salary is determined by taking the actual salary fund in such year divided by 12 months. The actual salary fund equals to the actual total salary paid for such tax year up to the statutory deadline for submission of the tax
• Tax incentive for investment projects with different phases registered with the licensing authorities under the first investment project application: compared to Decree 91, Circular 151 clarifies that the subsequent phases of the first investment project will enjoy tax
incentives for the remaining period of the first investment project counting from the time when those phases generate taxable income entitled to tax incentive. For projects which were licensed before 2014, if the subsequent phases of the first investment project have already enjoyed tax incentives in accordance with tax regulations before 1 January 2014, no adjustment of tax incentives will be allowed.