| Item |
Preferential Treatment |
Applicable to |
| Corporate income tax rate |
15% |
·Foreign-funded productive enterprises with an operation period of 10 years and above
·Foreign-funded hi-tech enterprises in Xiamen
·Joint ventures (investing in the construction of ports and docks with an operation period exceeding 15 years) enjoy a tax holiday within the first 5 years starting from the profit-making year and liable to a 50% cut for the next 5 years.
· Service enterprises with a foreign investment over USD 5 million (and an operation period exceeding 10 years) can be exempted from the income tax for the 1st profit-making year and liable to a 50% cut for the next 2 years. |
| 1st and 2nd profit- making years |
Tax break |
| 3rd ~5th profit- making years |
50% cut |
| After the expiration of the stipulated corporate income tax exemption and reduction period |
Enjoy a preferential tax rate of 10% |
· Enterprises of advanced technology type (10% within the 6th-8th years after tax holiday for the first 2 years and 50% cut for the following 3 year)
· Export-oriented enterprises (on condition that its export value taking up more than 70% of the total output value of the year) |
| Tax refund for reinvestment |
The income tax levied on the reinvested profit shall be refunded at full amount |
The foreign investor of a foreign-funded enterprise reinvests the after-tax profits of the enterprise to set up or expand an export-oriented enterprise or a hi-tech enterprise (with an operation period of no less than 5 years), or to increase the registered capital of the enterprise. |
| 40% of the income tax levied on the reinvested profit shall be refunded |
The foreign investor of a foreign-funded enterprise reinvests the profits on the same enterprise or to establish another foreign-funded enterprise (with an operation period no less than 5 years), or to increase the registered capital of the enterprise. |
| Income tax rebate |
40% of the domestic equipment investment can be deducted from the increased amount of income tax levied during the year of equipment procurement than that of the previous year |
Foreign-invested enterprises purchasing the domestic equipment within the total investment amount in accordance with relevant conditions stipulated by the State. |
| Taxable income rebate |
50% of the actual R&D fee can be deducted from the taxable income in that year |
Foreign-invested enterprises engaged in R&D and their R&D fee of that year in China increasing by over 10% (including 10%) over the previous year. |
| Remarks: The corporate income tax is calculated per year and prepaid at a quarterly basis. The settlements will be completed within 5 months after the end of the year. Overpayment will be refunded while deficiency shall be supplemented. |
