Exemption of Enterprise Income Tax from Enterprises Producing & Assembling Special Products Designated for Handicapped
· Document Number：No. 111  of the Ministry of Finance
· Area of Law： Civil Law Taxation
· Level of Authority： Departmental Regulatory Documents
· Date issued：10-24-2016
· Effective Date：10-24-2016
· Issuing Authority： Ministry of Finance State Administration of Taxation Ministry of Civil Affairs
· Status： Effective
Notice of the Ministry of Finance, the State Administration of Taxation and the Ministry of Civil Affairs on the Exemption of Enterprise Income Tax from the Enterprises Producing and Assembling the Special Products Designated for the Handicapped People
(No. 111  of the Ministry of Finance)
The public finance departments (bureaus), state taxation bureaus, local taxation bureaus and civil affairs departments (bureaus) of all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning; and the Finance Bureau and the Civil Affairs Bureau of Xinjiang Production and Construction Corps:
Upon the approval of the State Council, the policy on exempting the enterprises producing and assembling the special products designated for the handicapped people from enterprise income tax is hereby specified as follows:
I. During the period between January 1, 2016 and December 31, 2020, the resident enterprises meeting the following conditions shall be exempt from enterprise income tax:
1. The enterprise shall produce and assemble the special products designated for the handicapped people which are listed in the Catalogue of the Special Products Designated for the Handicapped People in China as issued by the Ministry of Civil Affairs.
2. The enterprise shall mainly sell the special products designated for the handicapped people which it produced or assembled and its annual revenue from the sale of the special products designated for the handicapped people (not including the export revenue) shall account for at least 60% of its total revenue.
The term “total revenue” refers to the total amount of revenue as prescribed in Article 6 of the Law of the People's Republic of China on the Enterprise Income Tax.
3. The enterprise shall have a complete set of accounting books and be able to provide the competent tax authority with taxation materials in an accurate and complete manner. The accounting treatment of its revenue obtained from the production or assembly of the special products for the handicapped people can be conducted in a separate and accurate manner.
4. The enterprise shall have at least one professional technician with a prosthesis maker certificate or orthotics maker certificate; if the enterprise has more than 20 production staff members, the number of the professional technicians with a prosthesis maker certificate or a orthotics maker certificate shall account for at least one sixth of the total number of its production staff members.
5. The enterprise shall have the special production and assembly equipment and tools for measurement and modeling, gypsum processing, socket forming, polishing, aligned assembly and functional training.
6. The enterprise shall have an independent reception room, a room for the making of prosthesis or orthotics (assistive devices) and a room for the functional training of prosthesis with an usable floor area of at least 115 square meters.
II. The enterprises enjoying the tax preference as prescribed by this Notice shall, in accordance with Announcement of the State Administration of Taxation on Issuing the Measures for the Handling of the Matters concerning the Preferential Enterprise Income Tax Policy (Announcement No. 76  of the State Administration of Taxation), file with the tax authorities for recordation, and properly keep and preserve the materials for future reference.
Annex: Catalogue of the Special Products Designated for Handicapped People in China
Ministry of Finance
State Administration of Taxation
Ministry of Civil Affairs
October 24, 2016