政策解读|境外投资者以分配利润直接投资暂不征收预提所得税

Core Viewpoint - The article discusses the policy that allows foreign investors to reinvest profits distributed from Chinese resident enterprises without incurring withholding income tax, effective from January 1, 2018 [3]. Policy Content - The policy applies to foreign investors who meet specific conditions for direct investment in China using distributed profits [3][4]. Applicable Conditions - Condition 1: The direct investment must be in non-prohibited projects and sectors for foreign investment [5]. - Condition 2: The direct investment includes actions such as capital increase, new establishment, and equity acquisition, but excludes certain types of acquisitions like those of listed companies, unless they meet specific strategic investment criteria [6][7]. - Condition 3: The profits used for direct investment must be actual distributions of retained earnings, such as dividends [8]. - Condition 4: The profits must be paid in cash directly from the distributing enterprise's account to the investment enterprise or equity transfer party, without prior circulation in other accounts [9]. - Condition 5: "Foreign investors" are defined as non-resident enterprises as per the Corporate Income Tax Law, while "Chinese resident enterprises" are those legally established within China [10].