Enterprise Income Tax:

1. The income tax for certified hi-tech foreign-invested enterprises shall be levied at 15% starting from the taxable year when it is so recognized.The hi-tech foreign-inversted enterprises of a production nature, scheduled to operate for not less than ten years , shall, from the profit-making year on, be exempted from income tax in the first and second years and allowed a 50% reduction in the third to fifth yeats (7.5%);

2. If the above enterprises, after the expiration of the tax exemption and reduction period, continue to be enterprises of advanced technologies, they may continue to enjoy a 50% reduction of income tax for another three years. If the tax rate is lower than 10% after the reduction, the tax shall be levied at 10%.

Local Income Tax:

1. Export-oriented enterprises and technologically-advanced enterprises, upon approval,may be exempted from local income tax during the period of exemption and reduction of enterprises income tax according to law, and may continue to be exemption from local income tax for another 9 years after the expiry of the above period .
2. Export-oriented and technologically-advanced enterprises, after the expiration of the period for exemption from local income tax set forth in Article 1,may be exempted from local income tax for the current year,on condition that their exported products account for more than 70% of the their output value for the year.

3. Those enterprise with investment in construction projects of energy, communication, harbors, etc. may be exempted from local income tax during the period of income tax exemption and reduction, and may continue to be exempted from local income tax for another 6 years after the expiration of the said period.

4. Other enterprises of production nature apart from those set forth in the above Article 1,2 and 3 may be exempted from local income tax during the period of income tax exemption and reduction, and may continue to be exempted from local income tax for another 3 years after the expiration of the said period.

Tariffs & Import

Value-added Tax:

1. Foreign-invested projects, which fall into the Category of Encourage Projects and Part Ⅱ of the Projects Restricted for Foreign Investment in the Catalogue for the Guidance of Foreign Investment Industries, may be exempted from tariffs and import value-added tax, for equipment imported for their own use within their total investment, except for those commodities listed in the Catalogue o Import Equipment Not Exemption for Foreign Investment Projects.

2. Foreign-invested enterprises, when importing raw materials and part used for production of export products, may be exempted from tariffs and import taxes; products to be sold within China shall be subject to tariffs and import value-added taxes.

 Business Tax:

Foreign-invested enterprises, R&D centers established with foreign investment, foreign enterprises and foreign individuals shall be exempted from business tax for their proceeds from technological transfer, technological development and related technical consultancy and services.

Tax Refunding for Reinvestment:

Any foreign investor of a foreign-invested enterprise who directly reinvests its profit by increasing its registered capital, or uses the profit as capital investment to establish other foreign-invested enterprises shall, upon approval by the tax authorities, be refunded 40% of the income tax already paid on the reinvested amount. Reinvestment for establishing or expanding export-oriented or technologically advanced enterprises shall be refunded all of the income tax already paid on the reinvested amount.

Workflow of Corporations Entry WUSP