I. According to Article 85 of the Regulation on the Implementation of the Law of the People's Republic of China on Enterprise Income Tax (Decree No. 512 of the State Council of the People's Republic of China): "Income of qualified non-profit organisations, mentioned in subparagraph (4) of Artical 26 of the Law of the People's Republic of China on Enterprise Income Tax, does not include the income derived by a non-profit organisation from profit-making activities, unless otherwise prescribed by the competent finance and taxation departments of the State Council."

II. According to Article 1 of the Notice of the Ministry of Finance and the State Taxation Administration on Issues Concerning Income Tax Exemption for Non-profit Organizations (Cai Shui [2009] No. 122): " Non-profit organizations are eligible for an exemption from income tax on the following income:

(I) Income obtained as donations from other entities or individuals;

(II) Income from government subsidies apart from the financial allocations specified in Article 7 of the Law of the People's Republic of China on Enterprise Income Tax. This does not include income obtained from government purchase of services;

(III) Membership fees collected following the provisions set by civil affairs and financial departments at or above the provincial level;

(IV) Interest generated from bank deposits of non-taxable income and income exempt from taxation;

(V) Other eligible income specified by the Ministry of Finance and the State Taxation Administration. "