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China expands tax breaks for service outsourcing industry

Updated: Nov 14,2016 8:14 PM     Xinhua

BEIJING — China will extend tax breaks to outsourcing service providers in more cities as part of attempts to boost service trade, the Ministry of Finance said on Nov 14.

Service firms with advanced technology in 10 cities, including Shenyang, Urumqi, Qingdao and Ningbo, will have their corporate income tax lowered from 25 percent to 15 percent, from 2016 to 2018, the ministry said in a statement.

Meanwhile, the firms’ staff education expenses will be tax-deductible as long as they account for no more than 8 percent of total wages, the statement said.

The move is additional to existing tax breaks that apply to similar firms in 21 other cities.

The Chinese government has vowed to speed up service trade development to optimize foreign trade structure, foster new growth and increase employment.

China’s service trade rose 24 percent year on year to 3.5 trillion yuan ($511.6 billion) in January-August, continuing the trend for double digit growth since the start of the year.