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My Views On China’s Preferential Tax Policies
Heading
Under the policy of reform and opening up to the out-side world, China is now fully engaged in its socialist moderizational drive, in which capital is a essential and fundamental element, esp in China’s infrustracture construction. In light of its great need for fogeign capital, China has made for foreign investors all kinds of preferential policies, esp tax policies, which are aimed at attracting more foreign capital and foreign investment.
Take tax policies for an example, according to China’s Tax Law, the income tax on enterprises with foreign investments and foreign enterprises should be computed on the taxable income at the tax rate of 33% (30% to the central government and 3% to the local government).The follows are a small portion of the preferential policies for enterprises with foreign investments and foreign enterprises, which can be found in China’s Income Tax Law For Enterprises With Foreign Investments And Foreign Enterprises.
Examples
“The income tax on enterprises with foreign investments established in Special Economic Zones, foreign enterprises which have organizations or establishments, in Special Economic Zones engaged in production or business operations, and an enterprise with foreign investments of a production nature in Economic and Technological Development Zones, shall be levied at the reduced rate of fifteen percent.”
“The income tax on enterprises with foreign investments in other regions defined by the State Council, within the scope of energy, transportation, harbour, wharf or other projects encouraged by the state, may be levied at the reduced rate of fifteen percent.”
“The income tax on enterprises with foreign investments of a production nature established in coastal economic open zones or in the old urban districts of cities where the Special Economic Zones or the Economic and Technological Development Zones are located, shall be levied at the reduced rate of twenty four percent.”
Besides, there is a most generally known preferential policy, noted as “Exempted In Two Years and Halfened In Three Years”, a Chinese brief version with the actual meaning “Any enterprise with foreign investments of a production nature scheduled in operate for a period of not less than ten years shall, upon examination and verification by the tax authorities of an application filed by the enterprise, from the year beginning to make profit, be ex.. |
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