The public finance departments (bureaus), development and reform commissions, and commerce departments of all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning; the tax services of the State Administration of Taxation ("SAT") of all provinces, autonomous regions, municipalities directly under the Central Government, and cities under separate state planning; and the Financial Bureau, the Development and Reform Commission, and the Commerce Bureau of Xinjiang Production and Construction Corps:

For the purposes of implementing the decisions and deployments of the CPC Central Committee and the State Council, and further encouraging overseas investors to make investments in China, you are hereby notified of the issues on the policy of temporary exemption of withholding taxes on the direct investment made by overseas investors with distributed profits as follows:

I . Where the profits distributed by a resident enterprise within the territory of China to an overseas investor are directly invested within the territory of China, the applicable scope of the policy of temporary exemption of withholding taxes shall be expanded from investment projects in the encouraged category to all projects and fields for which foreign investment is not prohibited.

II . An overseas investor that is temporarily exempted from withholding taxes shall concurrently meet the following conditions:

(1) The direct investment made by the overseas investor with distributed profits includes the equity investment made by the overseas investor, such as increased capital funds, new construction, equity acquisition, among others, with the distributed profits, but excludes the increase, conversion or acquisition of shares of a listed company (excluding eligible strategic investment). It specially means:

(a) increase or conversion of paid-up capital or capital reserve of a resident enterprise within the territory of China;

(b) investment in the formation of a new resident enterprise within the territory of China;

(c) acquisition of equities of any resident enterprise within the territory of China from a non-affiliated party; and

(d) other means specified by the Ministry of Finance and the State Administration of Taxation.

Enterprises invested in by overseas investors by the aforesaid means of investment are collectively referred to as invested enterprises.

(2) The profits distributed to the overseas investor are the dividends, bonuses or other equity investment income formed by the retained income that is actually distributed by a resident enterprise within the territory of China to the investor and has been realized.

(3) Where the profits of the overseas investor used for direct investment are paid in cash, the relevant funds shall be directly transferred from the account of the profit distributing enterprise to the account of the invested enterprise or the equity transferor, and shall not be turned over to other domestic or overseas accounts before the direct investment is made; and where the profits of the overseas investor used for direct investment are paid in kind, negotiable securities or other non-cash forms, the ownership of the relevant assets shall be transferred directly from the profit distributing enterprise to the invested enterprise or the equity transferor, and shall not be held by any other enterprise or individual on its behalf or be held temporarily before the direct investment is made.

III . An overseas investor that meets the conditions as specified in Article 2 of this Notice shall make a declaration according to the tax administration requirements, and truthfully provide the profit distribution enterprise with the materials proving that it meets the policy conditions. A profit distribution enterprise that believes on the basis of an appropriate review that an overseas investor complies with the provisions of this Notice may temporarily not withhold the withholding taxes according to the provisions of Article 37 of the Enterprise Income Tax Law , and undergo the recordation formalities with the competent tax authority.

IV . Tax authorities shall strengthen follow-up administration according to law. Where an overseas investor that has enjoyed the policy of temporary exemption of withholding taxes as prescribed in this Notice is found not to meet the prescribed conditions through the follow-up administration and verification by the tax authority, the overseas investor shall be deemed to have failed to file enterprise income tax returns as required, and be held liable for its deferred tax payment, except that the profit distribution enterprise shall be held liable. The period for the deferred payment of taxes shall be calculated from the payment of the relevant profits.

V . An overseas investor that may enjoy the preferential policy under the provisions of this Notice but has not actually enjoyed the policy of temporary exemption of withholding taxes may apply for enjoying exemption within three years after actually paying relevant taxes and for refunding the taxes that have been paid.

VI . Where an overseas investor actually recovers the direct investment entitled to the treatment of the policy of temporary exemption of withholding taxes through equity transfer, repurchase and liquidation, among others, it may, within seven days of actual collection of corresponding funds, declare to the tax authority for the payment of the deferred taxes under the prescribed procedures.

VII . Where, after an overseas investor enjoys the policy of temporary exemption of withholding taxes prescribed in this Notice, the invested enterprise is restructured and meets the conditions for special restructuring, and has been actually exempted from the tax according to the provisions on special restructuring, it may continue to enjoy the treatment of the policy of temporary exemption of withholding taxes, and is not required to pay the deferred taxes according to the provisions of Article 6 of this Notice.

VIII . For the purpose of this Notice, an "overseas investor" means a non-resident enterprise as prescribed in paragraph 3 of Article 3 of the Enterprise Income Tax Law , and a "resident enterprise within the territory of China" means a resident enterprise legally formed within the territory of China.

IX . This Notice shall come into force on January 1, 2018, upon which the Notice of the Ministry of Finance, the State Administration of Taxation, the National Development and Reform Commission and the Ministry of Commerce on Issues concerning the Policy of Temporary Exemption of Withholding Income Tax from Direct Investment Made by Overseas Investors with Distributed Profits (No. 88 [2017], MOF) shall be repealed. This Notice may apply to the dividends, bonuses and other equity investment income obtained by an overseas investor on and after January 1, 2017, and the taxes that have been paid shall be governed by Article 5 of this Notice.

 Ministry of Finance

State Administration of Taxation

National Development and Reform Commission

 Ministry of Commerce

September 29, 201