China Exempts Outsourcing Companies from Business Tax

The Chinese government announced on Wednesday that it will exempt offshore service outsourcing companies from business tax in 21 of its major cities from July 1 of this year through to the end of 2013.

The announcement comes as Beijing pushes to promote growth in China’s outsourcing industry to compete with other countries in the region. The 5 percent tax exemption will cover revenue derived from business process outsourcing, information technology outsourcing, and knowledge process outsourcing services, according to a statement released jointly by the nation’s tax, commerce, and finance ministries.

The 21 cities covered under the government notice are: Beijing, Changsha, Chengdu, Chongqing, Dalian, Daqing, Guangzhou, Hangzhou, Harbin, Hefei, Ji’nan, Nanchang, Nanjing, Shanghai, Shenzhen, Suzhou, Tianjin, Wuhan, Wuxi, Xiamen, and Xi’an.

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