The preparation period refers to the period from the date when the enterprise is approved to start production and operation (including trial production and trial operation).

It is clear in the tax law that the end of the preparation period is the date when the enterprise begins to operate. According to the Notice of State Taxation Administration of The People's Republic of China on Several Tax Issues Concerning the Implementation of Enterprise Income Tax Law (Guo [2010] No.79).

However, in practice, there are three main opinions about the end of the preparation period, namely, the date of obtaining the business license, the date of obtaining the first income, and the date of starting production and operation. Specifically, the caliber of the local taxation bureau shall prevail.