On 25 July 2013, the State Administration of Taxation (SAT) issued an announcement (SAT Gong Gao [2013] No. 43) clarifying the application of tax incentives designed for software enterprises in the Notice Cai Shui [2012] No. 27 which grant tax exemption in the first 2 years and a 50% tax reduction in the subsequent 3 years and apply to qualified software enterprises established on or after 1 January 2011.
The announcement applies retroactively as from 1 January 2011 and its content is s…