Jilin Chemical books tax benefits
PetroChina subsidiary Jilin Chemical Industrial has benefited from the central government's preferential tax policy for the northeast rustbelt, reporting a sharp increase in profits for the third quarter.
The integrated oil refiner and maker of petroleum, fertiliser and petrochemicals said that under the policy, its taxable profit for the third quarter to September was slashed to 505 million yuan from 1.9 billion yuan.
As a result, the H share, which suffered losses between 2000 and 2002, saw accumulated losses reduced to 1.11 billion yuan.
Under mainland accounting standards, the company booked deferred tax assets and an increase in net profit of 366 million yuan.
Another tax benefit for Jilin Chemical afforded under the preferential policy is the flexibility to extend the period over which the company can depreciate its fixed assets by up to 40 per cent. This will increase its depreciation expense and reduce its profit and tax liability.
Jilin Chemical can also save 10 million yuan this year under a separate tax policy that reduces its fixed-asset import tax liability.
Partly due to the tax policies and because of a marked improvement in its gross profit margin, the company booked a third-quarter net profit of 1.64 billion yuan, up from 107.06 million yuan in the same quarter last year.
For the first nine months of the year, net profit surged 547 per cent year on year to 2.25 billion yuan.
