Enterprises Income Tax

1. The income tax rate of the productive foreign-funded enterprises is 24%. A reduced rate of 15% is granted in the enterprise income tax for the technology-intensive and knowledge-intensive projects, projects with the foreign investment over US$30 million, projects with a long return period and for the projects of energy, communications and harbor construction.
2. A reduced rate of 15% in the enterprise income tax and exemption from local income tax are granted for the productive foreign-funded enterprises located in the Economic and Technical Development Zone. A reduced rate of 15% is granted in the enterprise income tax for foreign-funded enterprises that are confirmed to be high and new technology enterprises set up in High and New Technology Development Zone.
3. The productive foreign-funded enterprises with actual operation term of over 10 years are exempt from the enterprise income tax for the first two years and are granted a 50% reduction of the enterprise income tax from the third through the fifth year since the profit-making year on.
4. After the period of exemption and reduction of enterprise income tax granted in accordance with the stipulations of the tax law, a reduction of 50% is granted in the enterprise income tax for the export-oriented foreign-funded enterprises whose value of exported products accounting for over 70% of the output value of the products for the same year. The enterprises that accord with the above demands may pay the enterprise income tax at a reduced rate of 10% if they have paid tax at a rate of 15%, and at the same time they are exempt from local income tax.
5. Technology-advanced foreign-funded enterprises may continue to enjoy an extended three-year-period of a 50% reduction in the enterprise income tax when they are still technology-advanced enterprises after the period of exemption from or reduction of enterprise income tax granted according to the stipulations of the tax law. If the tax rate is lower than 10% when the enterprises enjoy a 50% reduction, they should pay the enterprise income tax at a rate of 10%, and at the same time they can enjoy an exemption from local income tax.
6. With the application of the enterprises and the approval of the tax authorities, 40% of the enterprise income tax already paid for the reinvestment shall be returned to the foreign investors in case that the foreign investors invest into the existing enterprises so as to increase the registered capital or set up another foreign-funded enterprise by means of the shared-profit. If the direct reinvestment is for the establishment or expansion of an export-oriented and a technology-advanced enterprise, the total of the enterprise income tax already paid for the reinvestment shall be returned.
7. The foreign investors are exempt from income tax for the profits gained from the foreign-funded enterprises, no matter if they remit the money out of China.

Taxation Preferential Policies

• Enterprises Income Tax
• Local Income Tax
• Taxation on the Imported Equipment