PRC Foreign Tax Credit Regime - (II) Analysis of Caishui [2009] No. 125

The PRC State Administration of Taxation and Ministry of Finance jointly issued a tax circular on 25 December 2009 ("Notice on Foreign Tax Credit Issues for Enterprise Income Tax", Caishui [2009] No. 125 (Circular No. 125)) that interprets the foreign tax credit (FTC) rules as provided in articles 23 and 24 of the Enterprise Income Tax (EIT) Law. Further to our Tax Analysis (P94/2009, dated 10 December 2009) discussing the PRC FTC regime prior to the issuance of Circular No. 125, this article summarizes the key points of Circular No. 125, as well as our observations, to facilitate readers' understanding of the new rules and keep pace with recent developments and changes to the PRC FTC regime.

Deloitte China Tax Analysis - January 15, 2010 ( English, Chinese)