Question: Our company’s overseas operations in 2014 confirmed a loss of 2 million yuan. Since the losses of overseas business institutions cannot be offset against the profits of domestic business institutions, they can only be made up with the overseas income of the region in the following years. What will happen in the future? What is the specific time limit for making up? It depends on the domestic profit situation. "Notice of the Ministry of Finance and the State Administration of Taxation on Issues Concerning the Credit of Overseas Income Taxes of Enterprises" (Caishui [2009] No. 125) stipulates that when calculating the overseas taxable income in a consolidated manner, the enterprises in the same overseas When a country (region) establishes a branch without independent tax status, the losses calculated in accordance with the relevant provisions of the Enterprise Income Tax Law and the Implementing Regulations shall not be deducted from the taxable income within its territory or in other countries (regions), but may be used in the same country ( (region) other projects or income in subsequent years shall be made up in accordance with regulations. At the same time, point 14 of the "Announcement of the State Administration of Taxation" (State Administration of Taxation Announcement No. 1 of 2010) of the "Operational Guidelines for Overseas Income Tax Credits for Enterprises" clarifies the relevant provisions of Article 3 of Finance and Taxation [2009] No. 125. Explanation: If the sum of an enterprise's domestic and foreign income in the same tax year is a positive number, the losses incurred by its overseas branches will be the uncompensated portion due to the above restrictions on carryover compensation (hereinafter referred to as the non-actual loss amount) , the future carryover period in this branch is not subject to the 5-year limit. That is: (1) If the sum of the enterprise’s current domestic and overseas profits and losses is zero or a positive number, the non-actual losses of its overseas branches in the current year can be carried forward indefinitely to make up for it; (2) If the sum of the profits and losses earned by the enterprise at home and abroad for the current period is a negative number, then the actual loss amount for the part where the losses of the overseas branches exceed the profits of the enterprise shall be calculated according to the period stipulated in Article 18 of the Enterprise Income Tax Law (i.e. the closing period). The maximum transfer period shall not exceed 5 years) to make up for losses, and the non-actual losses that do not exceed the company's profit can still be carried forward indefinitely to make up for the losses. Enterprises should keep records of the carry-forward and compensation situations where the actual losses and non-actual losses of overseas branches are different. For specific operations, please refer to the attachment, Example 2 of the "Operational Guidelines for Corporate Overseas Income Tax Credit". Question: Our company is a recognized high-tech enterprise. Due to development needs this year, we closed down our overseas offices and sold the real estate we purchased for office use at that time, thus obtaining a relatively large amount of overseas income. Can this income be incorporated? Is corporate income tax calculated at 15%? Subject to availability. Article 1 of the "Notice of the Ministry of Finance and the State Administration of Taxation on Applicable Tax Rates and Tax Credits for Overseas Income of High-tech Enterprises" (Caishui [2011] No. 47) stipulates that the total research and development expenses related to all domestic and overseas production and operation activities, For high-tech enterprises that have applied for and been recognized with indicators such as total revenue, total sales revenue, high-tech product (service) income, etc., their overseas-sourced income can enjoy preferential high-tech enterprise income tax policies, that is, their overseas-sourced income can be treated in accordance with 15 % preferential tax rate to pay corporate income tax. When calculating the overseas credit limit, the total domestic and overseas tax payable can be calculated according to the preferential tax rate of 15%. Therefore, if a high-tech enterprise meets the provisions of the above documents, this income can be subject to corporate income tax at a preferential tax rate of 15%. If the overseas income causes the company's high-tech product (service) income to account for less than 60% of the company's total revenue for the year, and it no longer meets the conditions for high-tech enterprise recognition, the company shall fulfill its tax obligations in accordance with the law and no longer enjoy the 15% preferential tax rate for that year. , all income is subject to corporate income tax at a tax rate of 25%. Question: My company is a software manufacturer and has paid a software royalty fee to an overseas related party. Can this fee be deducted before calculating corporate income tax? Subject to availability. Article 5 of the "Announcement of the State Administration of Taxation on Corporate Income Tax Issues Concerning Enterprises' Payments to Overseas Related Parties" (State Administration of Taxation Announcement No. 16, 2015) stipulates that enterprises must pay royalties when using intangible assets provided by overseas related parties. , the degree of contribution of related parties to the value creation of the intangible assets should be considered to determine the economic benefits that each party should enjoy. If an enterprise pays royalties to related parties that only have legal ownership of intangible assets but have not contributed to their value creation, and do not comply with the arm's length principle, they shall not be deducted when calculating the enterprise's taxable income.