Tax Policies Concerning Foreign-funded Enterprises and
Foreign Enterprises in National ETDZs
Part One: Enterprises income tax rate
1.Productive enterprises
Tax rate: 15 percent
2.Non-productive enterprises
Tax rate: 30 percent
Among them:
(1) Knowledge intensive and technology intensive projects and
Technology Development Center; Projects with a long investment
period
Tax rate: 15 percent
(2) Export-oriented enterprises with its export value of the year
equals or exceeds 70percent of its output value of the same year
after the exemption-reduction period is over
Tax rate: 10 percent
(3) Financial institutions with foreign operation capital above 10
million US$ and an operation period of 10 years or more.
Tax rate: 15 percent
(4) projects concerning energy, transportation, port or projections
engorged by the governments?
Tax rate: 15 percent
Part Two: Pre-withdraw income rate
1.Profits derived from interests, bonus stock, rent,
licensing rights fees and other gains from various zones if foreign
businessmen don't set up any organizations in Chinese
territory(except those exemptions according to the
laws)
Tax Rate: 10 percent
2.For those provide advanced technology or preferential
conditions
Granted an exemption by the approval of the state council or at a
rate lower than 10percent by the local government?
3.Profits derived from foreign-funded
enterprises
Exempted
Part Three: The exemption-reduction period of the
enterprise income tax
(The operation period is over ten years, commencing from
the year in which the enterprises make profits)
1.Productive enterprise, high-tech enterprises or
technology development center
An exemption for the first and second year and a reduction by half
from the third to fifth year
2,The newly established enterprises undertaking
transportation, electric power, water conservancy, postal service,
broadcasting and television, etc in middle western
regions
An exemption for the first and second year and a reduction by half
from the third to fifth year
3.Non-productive enterprises
(1) In the Special Economic Zones, the service business enterprises
with foreign operation capital above 5 million US$ and an operation
period of 10 years or more
(2) In the Special Economic Zones or other regions approved by the
State Council, the financial institutions with foreign operation
capital above 10 million US$ and an operation period of 10 years or
more; An exemption for the first year and a reduction by half from
the second to third year
?
4. Technology advanced enterprises
Granted a reduction by half for 3 more years as long as it
remains advanced-technology-oriented after the exemption-reduction
period is over.?
5.Middle Western Areas
For the foreign-invested enterprises of encouraged type, it can
enjoy an extended 3 years reduction at 15percent income rate after
the exemption-reduction period is over.?
6.Enterprise who engaged in the construction of port and
ducks with an operation period of 15 years and
above
An exemption for the first to fifth year and a reduction by half
from the sixth to tenth year?
7.Enterprises which engaged in agriculture, forestry and
animal husbandry, and those in undeveloped border
areas.
By the approval of state supervising department, it continues to
enjoy a reduction of 15 percent-30 percent of its due tax within 10
years after the exemption-reduction period is over; The
agricultural specialty for the purpose of protecting the
environment in middle western areas are granted an exemption from
agricultural specialty tax within 10 years?
Part Four: Refund of Tax for reinvestment
1, The foreign investor of the enterprise with foreign investment
that makes a direct reinvestment in their enterprise or in other
enterprises scheduled to operate for a period? of more than 5
years with foreign investment using profits obtained form their
enterprises in return shall enjoy a refund of 40 percent of the
paid income tax for the reinvestment.
2, If the reinvestment is made in an export or technology advanced
enterprises; the investor shall enjoy the entire refund of the said
income tax for the part of reinvestment.?
Part Five: Customs Duties
1, Imported Equipment?
(1) The productive, constructive and managerial equipment, supplies
and transferred goods in Free Trade Zones and Export Processing
Zones are granted an exemption from customs duties and value-added
tax；
(2) For the foreign investment projects of encouraged type and
limited type B which conform to "Guiding Catalogue for Foreign
Investment Industries" and transfer their technology, the imported
non-utility equipments (including the technology, Kit piece and
spare parts imported with the equipments according to the
contracts)within the total amount of investment will be exempted
from duty and value-added tax except goods listed in "Non-duty-free
Imported Goods Catalogue for Foreign Investment Projects".
2, Exported product
Exempted from export duties with the exception of those under state
restriction; those products with its values increase by over 20
percent due to substantial processing may be exempted from export
duties by the Customs as long as they are documented by the
competent authorities concerned. The enterprises and managerial
departments will enjoy an entire refund for the productive
equipments, original material, spare and accessories parts,
constructive supplies and office equipment purchased with Chinese
territory?
Part Six: Value-added Tax
1, three types of rate at 17 percent, 13 percent, 6 percent
respectively according to different products categories; granted
exemption or reduction according to the national tax laws
2, exempted for the products sold in Special Economic Zones; common
tax payer is levied at rate of 6 percent
Part Seven: Investment adjusting tax of fixed
assets
Exemption for investment of foreign-funded and foreign
enterprises in Chinese territory
Part Eight: Urban House Tax
Exempted
Part Nine: Cultivated land use
Exemption for productive projects of foreign invested
enterprises
Part Ten: Foreign Exchange Control
1, the foreign-invested enterprise are allowed to change RMB into
foreign exchange in the regular projects
2, the enterprises in Free Trade Zones and Export Processing Zones
are allowed to reserve foreign exchange
3, the banking grantee system is not implemented for the processing
trade in Free Trade Zones and Export Processing Zones?
Part Eleven: Polices approved by the local
government
Please visit the websites of National ETDZs to?get
details.
Note: The?article above is compiled
only for reference?according to the related information from
China Association of Development Zones.? It mainly bases
on?current valid regulations of the State Council and related
department before June 6, 2001, please check the latest Chinese
laws and regulations.
