Some Economic Policies Further Supporting Cultural Undertaking Development

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(GBF No. (2006)43)


All provincial, autonomous region and municipal People’s Governments, all State Council ministries and commissions, all directly subordinate organs:


The Ministry of Finance and Central Propaganda Department “Some Economic Policies Further Supporting Cultural Undertaking Development” have been agreed to by the State Council, and are hereby issued to you, please earnestly implement them.

State Council Secretariat

9 June 2006


In order to strengthen the construction of advanced Socialist culture, promote the healthy development of propaganda and cultural undertakings, and further implement cultural structural reform, according to the requirements concerning “expanding government input into cultural undertakings, progressively shaping a relatively complete public culture service system covering all of society in the “Outline of the 11th Five Year Plan for National Economic and Social Development of the People’s Republic of China”, economic policies related to supporting cultural undertaking development during the “11th Five-Year Plan” period are hereby put forward:


I, Continuing to levy cultural undertaking construction fees

(1) All sorts of commercial entertainment venues such as song halls, dance halls, karaoke and dance halls, music teahouses and golf courses, billiard halls, bowling halls, etc. will pay a cultural undertaking construction fee amounting to 3% of their business income. Advertising media work units such as radio stations, television stations, newspapers and periodicals, etc., as well as outdoor advertising business work units, will pay a cultural undertaking construction fee amounting to 3% of their business income.

(2)Cultural undertaking construction fees are collected together with entertainment business or advertising business taxes by local taxation organs. Cultural undertaking construction fees paid by Central and State organs’ subordinate work units, are completely transferred to the central treasury after collection by the local taxation organs. Locally paid cultural undertaking construction fees are to be completely transferred to the provincial-level treasury.

Cultural undertaking construction fees are brought into financial budget management, and are used by central and provincial governments respectively to establish special funds to be used for cultural undertaking construction. The Ministry of Commerce must, on the basis of relevant regulations, and together with corresponding departments, revise and perfect the original policies, and formulate new cultural undertaking construction fee levying and use management rules, in order to reflect the management requirements of government-type funding and budgeting, and strengthen macro-level control and supervision strength over funds.


II, Continuing to implement preferential tax policies

Preferential value-added tax policies for propaganda and culture work units will continue to be implemented, and preferential business tax policies will be implemented for film distribution work units. Relevant department must, at the same time as perfecting corresponding policies, make breakthroughs in supporting focus points, and even better stimulate the healthy development of propaganda and culture undertakings. Concrete implementation rules will be formulated separately by the Ministry of Finance and the General Administration of Taxation.


III, Continuing to implement economic policies stimulating film undertaking development

(1) Collecting 5% of film screening income to establish a “Special State Film Undertaking Development Fund”, implementing funding and budgeting management methods, to be used for the macro-level control of the film sector. The Ministry of Finance must further perfect original special film undertaking development funding management policies together with corresponding department, and formulate new special State film undertaking development fund collection and use management rules.

(2) Continuing to establish special excellent film product funds, to be used to support the shooting of excellent film products.


IV, Continuing to strengthen financial input in propaganda and culture work units

(1) Central and provincial-level financial administrations establish special propaganda and culture development funds, annually listing appropriation budgets with the real expense quantities of 2005 as basic numbers. The Ministry of Finance must research and revise special propaganda and culture development fund management rules together with relevant departments.

(2) Integrating subsidy fees such as the “10000 Mile Border Cultural Long Corridor), establishing a “Special Central Fund to Subsidize  Local Culture and Sports Undertaking Development”, to be used to support the development of local culture, sports and broadcasting work units. Relevant local People’s Governments also must progressively strengthen input into the cultural sector.


V, Establishing and completing a special fund management system

In order to stimulate propaganda and culture undertaking development, strengthen regulation capacity, guarantee focus requirements and standardize funding management, the financial departments must perform special fund budgeting arrangement. Departments using special funds must complete systems and strengthen management according to relevant financial regulations, guarantee that special fund are put to special use, and accept supervision and inspection by financial and audit departments.


VI, Continuing to encourage donations to propaganda and culture undertakings


Concerning social forces’ public interest donations through State-approved non-commercial public interest organizations or State organs’ propaganda and culture undertakings, after examination by the taxation organs, when taxpayers pay enterprise or income tax, the part that falls within 10% of annual taxable income, may be deducted when calculating annual taxable income; when calculating individual taxable income, and the donations do not exceed 30% of the taxable income reported by the taxpayer, it may be deducted from the taxable income. The scope of public interest donations is:

(1) Contributions to State focus symphony orchestras, ballet troupes, opera troupes and Beijing opera troupes and other ethnic artistic performance troupes.

(2) Contributions to public interest-type libraries, museums, science and technology halls, art galleries, revolutionary history memorial halls, etc.

(3) Contributions on local focus cultural heritage protection work units.

(4) Contributions to non-production or commercial-type cultural halls subordinate to administrative culture management departments or mass art halls to accept social public interest-type activities, programmes and cultural facilities, etc.,


VII, Grasping implementation, strengthening management

All levels’ financial and taxation departments must earnestly implement all economic policies supporting cultural undertaking development. Propaganda and culture controlling departments must fully give rein to the macro-level control function of related policies, and broaden cultural undertaking funding input channels. Propaganda and culture organs must according to the general Central distribution of cultural structural reform, deepen cultural structural reform, and stimulate the development of cultural industries; they must complete financial service systems, and strengthen find and special find management; accepted donation monies must be specially used for the development of propaganda and cultural undertakings, and may not be overrun, diverted or even privately divided, and donations may also not be used as a reason to mess up allocations, indiscriminately collect funds from other departments, etc. It is necessary to investigate the responsibility and strictly deal with all sorts of activities violating regulations and discipline.























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