Foreign-invested enterprises (equity joint venture, cooperative joint venture, foreign wholly-owned enterprise),

1. For newly established foreign-funded production enterprises with an operational period of more than 10 years, from the first profit-making year, they are exempt from corporate income tax in the first two yeas, and exempt from 50% of corporate income tax in following three years. The corporate income tax rate accords with related regulations issued by national and city governments.

2. For Foreign investors who invest profit in the same enterprise to increase registered capital of the enterprise or to establish other foreign-funded enterprises with an operational period of more than 5 years, 40% of their paid corporate income tax in terms of the invested part can be refunded after the application of investors and the approval of tax administrations. For foreign investors who directly invest in Mainland China to establish or expand export-oriented enterprises or advanced technology enterprises, the paid corporate income tax can be refunded in terms of the invested part pursuant to related regulations.

3. For foreign-funded enterprises that are confirmed as “export-oriented enterprise” or “advanced technology enterprise”, after being approved qualified, they are entitled to following preferential polices:

(1) After the expiration of the above-mentioned tax holiday, export-oriented enterprises, whose output value of exported products accounts for more than 70% of the total output value of the same year are entitled to 50% of corporate income tax according to the current tax rate.

(2) After the expiration of the above-mentioned tax holiday, those enterprises with advanced technology can be entitled to 50% of the corporate income tax for additional three years.

(3) “Enterprises of two categories” that obtain the land use right through requisition or transfer can be entitled to the reduction or exemption from land use fee according to the land grade.

(4) All export-oriented enterprises whose output value of exported products accounts for more than 70% of the total output value of the same year are exempt from local corporate income tax.

4. Foreign investors that remit abroad the profits obtained from foreign-funded enterprises are exempt from the withholding income tax

5. Sino-foreign equity joint ventures, which undertake port and quay construction with the operational period of more than 50 years, are exempt from corporate income tax for the first profit-making five years, and are exempt from 50% of corporate income tax for the next five years after the application of the enterprise and the approval by tax administrations of provinces, autonomous regions and municipalities directly under the Central Government where enterprises are located.

6. Enterprises, which invest in plant production, livestock breeding and fishery, as well as sell self-produced products, are exempt from value-added tax.

7. Imported equipments for foreign-funded objects that confirmed as encouragement category are exempt from custom duty and value-added tax. Enterprises, which purchase homemade equipments, can be refunded value-added tax, and credit the corporate income tax for 40% of the purchase amount of the homemade equipments.

8. Foreign-funded enterprises which are confirmed as encouragement category or limitation category, exported-oriented enterprises, advanced technology enterprises, and foreign-funded R&D institutes are exempt from import duty and value-added tax if they import equipments, spare parts and fittings for technological transformation with their own funds.

9. Further encourage foreign-funded enterprises to export for earning foreign currency. Carry out the policy of tax reimbursement for export.

Science and Technology Enterprises

1. For confirmed projects with Hi-tech fruits, within three years after the date of confirmation, the government will return the land use fee and land leasing fee for the land that projects occupied; service fee and registration fee of property rights for purchasing production and operation houses will be exempt; and part of property deeds can be refunded as a subsidy provided by the government; capacity-expanding fee for water resource and gas as well as additional fee for electric power that occurred during the construction can be exempt. Within three years after the date of confirmation, the paid sales tax, corporate income tax and value-added tax for local revenue will be under the support of ministry of finance with offering special fund.

2. Hi-tech fruits can be invested as intangible assets. The proportion of such hi-tech fruits in the registered capital may be up to 35%, unless otherwise agreed by the investing parties.

3. The government preferentially lists the confirmed projects with hi-tech fruits in the project plan for technological transformation, and offers support for capital investment and loan discount interest.

4. The confirmed enterprises with software production are exempt from corporate income tax in the first profit-making two years, and are exempt from 50% of cooperate income tax in following three years.

5. Key enterprises with software production in the national layout are entitled to the corporate income tax rate of 10% if they miss the tax holiday in the current year.

6. For enterprises that invest technological transformation projects established in China in accordance with national industrial policies, 40% of the needed homemade equipments for the project can be credited from the added corporate income tax over the last year in the year of equipments purchased.

7. From June 24, 2000 to the end of 2010, VAT general taxpayers who sell self-developed software products are entitled to the policy of “simultaneous collection and refund” for the part of the actual VAT that exceeds 3% after paying VAT of 17%.

8. From June 24, 2000 to the end of 2010, VAT general taxpayers who sell self-developed IC products (including silicon wafers) are entitled to the policy of “simultaneous collection and refund” for the part of the actual VAT that exceeds 6% after paying VAT of 17%.

 

Domestically-Funded Enterprises (Including Private Enterprises)

1. Newly established enterprises of consultation, information and technological service are exempt from income tax for 1-2 years.

2. Newly enterprises of traffic & transportation, post & telecommunication and communication are exempt from corporate income tax for one year and half of it for additional one year.

3. Other newly established “three industries” enterprises are exempt from corporate income tax for one year.

4. Newly established small industrial collective enterprises that adopt the method of authorized tax collection are entitled to half of the tax rate for 2 years.

5.  Job-hunting service enterprises: town collective enterprises which arrange jobs for more than 60% of the unemployed young people are exempt from income tax for three years and half of it for additional three years; enterprises that arrange jobs for 50%-60% of the unemployed are exempt from corporate income tax for 2 years and half of it for additional two yeas.

6. Private welfare enterprises: enterprises, in which persons of four types of deformity account for 50% of the production people, are entitled to the policy of “simultaneous collection and refund” for VAT; enterprises, in which persons of four types of deformity account for more than 35% of the production people, are exempt from corporate income tax; enterprises, in which persons of four types of deformity account for 10%-35% of the production people, are exempt from half of the corporate income tax.

7. The above-mentioned No.1-6 items on tax allowance policies are not applicable to real estate, securities, credit cooperatives, ballrooms, restaurants with Kara OK or KTV service, games rooms and individual contracting enterprises.

8. Projects with medium-scale experimental products are entitled to the policy of “refund of corporate income tax after collection” for 2 years.

9. Enterprises, which sell new products that are listed in plans of trial production identification for new products prepared by city economy and trade committee and city science and technology committee, are entitled to the policy of “refund after collection” for 25% of local VAT for 2 years.