On 8 January 2015, China's Ministry of Finance and State Administration of Taxation issued Circular (2014) 116, which introduces tax deferral for resident enterprises to recognize gains from noncash investments over five years.
In China, investments made in the form of noncash property are separated into the disposal of the property and the investment. Prior to Circular 116, noncash investment resulted in full taxation of the gain from the disposal of the noncash property in the year of dis…