Each local state Administration of Taxation in provinces, autonomous regions, municipalities directly under the jurisdiction of the central government and planned special cities:

After Circular of State Administration of Taxation on The Taxation Issues Concerning Export Goods by Foreign Investment Enterprises(No.189 [1999] promulgated by State Administration of Taxation)was announced, each local state Administration of Taxation has been seriously put it into effect. For the sake of benefiting the relevant departments of The State Council to know timely the circumstances that the policy are carrying out, after some study by SAT, now you are given the notice as follow:

1. All levels of state Administrations of Taxation must attach highly importance to the adjustment of the taxation policy, and as well as the examination and approval concerning export goods by foreign investment enterprises. You should adopt the proper and feasible measures to notice the new taxation regulation to every established foreign investment enterprise. Whether such an enterprise continues to be exempted from the tax or change to be returned the tax, is entirely chosen by the enterprise voluntarily;only can choose once. The enterprises that apply " No Levy and No Return" have to finish the registration at the end of this November. And this policy will be in effect to the end of next year. The established foreign investment enterprises that require to apply the policy of return tax can choose voluntarily levy first then return, or exemption, compensation and return, and do the report and registration in accordance with the relevant regulation of return tax.

2. Each local state Administration of Taxation in every province, autonomous region, municipality directly under the jurisdiction of the central government and planned special city must report State Administration of Taxation with a telegram the circumstances of examinations and approvals, the number of the established foreign investment enterprises which choose to continue the policy of no levy and no return, and the number of those which choose the policy of return tax (levy first and then return or exemption, compensation and return) before the deadline on Dec. 5,1999.

Hereby announced as above.

State Administration of Taxation

On November 16, 1999