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Tax Preference Policies Issued by the Government

2014-12-09 16:01:54

Tax preference policies issued by the government

Enterprise income tax

1.The enterprise income tax rate shall be 25%. Where there is a loss in   a taxable year of Enterprises, it may be brought forward to the succeeding   years and made up by the income of succeeding years, but the limit of   bringing forward may not exceed five years.

2.For the enterprise which conduct plantation of flowers, teas and other   beverage crops and spice crops and sea farming and inland farming, halve the   enterprise income tax.

3.For enterprise which conduct the following agricultural, forestry, animal   husbandry and fishery it is exempted from income tax or decreased the income   tax.

4.For the enterprises which undertake the projects stipulated in the   “Public infrastructure projects income tax preferential catalogue",   including the port and harbor, airport, railway, highway, city public   transportation, electric power and water conservancy, and undertake the   environmental and energy conservation projects, including public sewage   treatment, public garbage disposal, methane comprehensive exploitation and   desalination of sea water, from the year of the first operation income, it is   exempted from the income tax from the first to the third years and the income   tax from the fourth to the sixth years is halved.

5.For the income from qualified transfer of technology by enterprises,   it is subject to exempted income tax for the 5 million Yuan and it is subject   to collected by half for the portion exceeding 5 million Yuan.

6.Small-scale enterprises with minimal profits that conduct the   unlimited or non prohibited industries and satisfy the following conditions   are subject to the applicable enterprise income tax rate with a reduction of   20% .
  (1)Industrial enterprise, the annual payable tax not exceeds RMB 300,000 Yuan,   the employment not exceeds 100, the total assets not exceed RMB 30 million   Yuan.
  (2)other enterprise, the annual payable tax not exceeds RMB 300,000 Yuan, the   employment not exceeds 80, and the total assets not exceed RMB 10 million   Yuan.

7.High and new technology Enterprises that require key state support are   subject to the applicable enterprise income tax rate with a reduction of 15%.   Key software enterprises and integrated circuit enterprises in the national   layout are subject to applicable enterprise income tax rate with a reduction   of 10% if the tax exemption is not
  enjoyed in that year.

8.Where non-resident enterprises that have not set up institutions or   establishments in China, or where institutions or establishments are set up   but there is no actual relationship with the income obtained by the   institutions or establishments set up by such enterprises, they shall pay 10%   enterprise income tax in relation to the income originating from China.

9.Research and development fees incurred by Enterprises in the   development of new technology, new products and new skills and is not   calculated in current profits and losses as the intangible assets, weighted   deduction of 50% of the research and development fees may be computed in   taxable income; if the intangible assets are
  Formed, amortize on the basis of 150% of the intangible assets cost. For the   wages paid by Enterprises for job placement of the disabled and of other   personnel, on the basis of real deduction of the paid wage, weighted deduction   of 100% of the paid wage may be computed  in taxable income.

10.For venture investment enterprises that engage in equity investment   in the unlisted middle and small high tech enterprises for more than 2 year,   it may offset the taxable income at 70% of the investment amount in the 2nd   year of share holding. If it is not sufficient to be offset, it may be offset   in the following tax year.

11.The income obtained by Enterprises from the production of products in   line with state industrial policies through comprehensive use of materials   stipulated in the “Resources comprehensive use enterprise income tax   preferential category” may be deducted from the taxable income by 90%.

12.The investment by Enterprises on procurement of special facilities   for environmental protection, energy and water conservation and safe production   which are listed in the “Environmental special facilities enterprise income   tax preferential category”, “Water and energy conservation special facilities   enterprise income tax preferential category” and “Safety production special   facilities enterprise income tax preferential category” may be subject to an   offset tax amount at 10% ratio. If it is not sufficient to be offset, it may   be offset in the next 5 tax years.

13.Enterprises set up with approval prior to the promulgation of the   “Law of the People’s Republic of China on Enterprise Income Tax” that enjoy   low preferential tax rate in accordance with the tax laws and administrative   regulations at the current period may, pursuant to the provisions of the   State Council, gradually transit to the tax rate provide herein within five   years after Jan. 1st2008. Where such enterprises enjoy regular tax exemption   and reduction, the treatment continues to apply until expiry after the   implementation of this Law. However, those that fail to be entitled to this   treatment by reason of not making any profits, the preferential period shall   be calculated from the year 2008.
  (Basis of above polices: “The law of the people’s republic of China on   enterprises income tax” approved in the 5th conference of the 10th NPC in   Mar. 16th, 2007; “Implementing regulations of the law of the people’s   republic of China on enterprises income tax” (No.512 Decree of the State   Council) issued in Dec. 6th, 2007) 

Imports and exports tariff

1.For the export of the products manufactured by foreign investment   enterprises, it is exempted from the tariff and value added tax and the   export tax exemption, deduction and reimbursement policy is applicable.

2.For the raw material, auxiliaries, components and packing materials   used for the production of the exported products of the foreign investment   enterprises, it is exempted from the tariff and value added tax. If import   license is applicable, it only requires customs supervision and import license   is not required.
  (Basis of above polices: “Regulations of the state council on the foreign   investment” issued in Oct. 1986)

3.For encouraged items in the “Foreign investment industries guidance   category”, the foreign investment that meets the requirement of “Foreign   investment competitive industries category of the middle west ” and the   domestic funded projects supported by county, the self used imported   equipment within the total investment is exempted from tariff and import   linkage tax, except for the commodities listed in the “Category of non tax   exemption imported items of the foreign investment projects” and “Category of   non tax exemption imported items of the domestic funded projects”.

4. For the home equipments purchased by the foreign investment   enterprises within the total investment, if such equipments are listed in the   national tax free category, reimburse the value added tax of the of the home   equipments with full amount. For the imported technical products of the   foreign investment enterprises which meet the national industrial polices,   deduct or exempt the enterprise income tax of the purchased home equipment   according to the regulation.

5.For the already set encouraged type (including the types that meet the   requirement of “Foreign investment competitive industries category of the   middle west”) of foreign investment enterprises, foreign invested research   center, advanced technical and product exported type of foreign investment   enterprises, the import of the self used equipments and the supported   technology, components and spare parts is subject to exempted tariff and   import linkage tax, with the precondition that such import is within the   originally approved business scope and the purchase is self funded or the   equipments and the supported technology, components and spare parts cannot be   manufactured in China.

6.For the foreign investment enterprises, if it is required to import   the self used equipments for the production of the items listed in the   “National high tech products category”, along with the imported technology   and supporting components and spare parts, it is exempted from import tariff   and import linkage value added tax.

7. For the advanced technology listed in the “National high tech   products category” imported by foreign investment enterprises, the software   fees paid to the overseas is exempted from imported tariff and import linkage   tax.
  (Basis of above polices: “Regulation of the state council on the adjustment   of the imported and exported equipment tax policy” (No.[1997]37); “Views of   the Committee of Economic Trade for foreign Countries on further   encouragement of the foreign investment”(No.[1999]73); “National middle and   long term planning for science and technology development outline   (2006-2020)”(No.[2005]44)).

Several polices on software and integrated circuit

1. For the certified domestic new software enterprise and integrated   circuit enterprise, from the profit earning year, it is exempted from   enterprise income tax in the first and second year and it is collected by 50%   from the third to the fifth year.

2. For the integrated circuit enterprise with the investment of more   than 8 billion Yuan or the band width of the integrated circuit less than   0.25um, if the business period exceeds 15 years, from the profit earning   year, it is exempted from enterprise income tax from the first to the fifth   year and it is collected by 50% from the sixth to the tenth year.

3. For the integrated circuit enterprise with band width of the   integrated circuit equal to and less than 0.8um, after certification, from   the profit earning year, it is exempted from enterprise income tax in the   first and the second year and it is collected by 50% from the third to the   fifth year.

4. For the software purchased by the enterprises and public   institutions, if it meets the requirement of the fixed assets or intangible   assets, it is possible to account as fixed assets or intangible assets. With   the approval of the tax authorities, its depreciation or amortization years   may be shortened appropriately and the minimum is 2 years.

5. For the production equipments of the integrated circuit enterprises,   with the approval of the tax authorities, its depreciation years may be   shortened appropriately and the minimum is 3 years.

6. For the software developed and produced independently by the general   taxpayer, collect the value added tax at the rate of 17% before 2010. If the   real tax exceeds 3%. collect the tax and then reimburse it immediately. The   reimbursed tax amount should be used for the research and production   expansion of the enterprise, but it is not deemed as the taxable income, so   it is exempted from enterprise income tax.

7. If the general taxpayer of value added tax sells its self   manufactured integrated circuit and products (including the monocrystal e   silicon piece), collect the value added tax by 17%. If the real tax exceeds   6%, collect the tax and then reimburse it immediately. The reimbursed tax   amount should be used for the research and production expansion of the   enterprise, but it is not deemed as the taxable income.

8. For the employment training fees of the software and integrated   circuit manufacturing enterprises, the real amount is to be deducted from the   taxable income.  (Basis of above polices: "Polices of the state   council on the encouragement of the software and integrated circuit industry   development" (No [2000]18) issued in June 24th, 2000; "Tax policies   of the Ministry of Finance, SAT and Maritime Customs Administration on the   encouragement of the software and integrated circuit industry development”   (No. [2000]25) issued in Sep. 22th, 2000).