Tax incentives for foreigners investing in China

I. Tax Benefits:

Foreign-invested enterprises are temporarily exempted from urban land use tax, urban maintenance and construction tax, education surcharge and local education surcharge.

2. VAT discounts:

If foreign-funded enterprises drive local economic development, especially in the suburbs of Shanghai, and increase local local financial resources, the local government will provide more than 40% of VAT finance.

3. Preferential corporate income tax:

Similarly, corporate income tax is also provided with more than 40% of financial support.

Fourth, tax preferences for other specific projects:

1. Foreign-invested enterprises engaged in service industries established in special economic zones with foreign investment of more than 5 million U.S. dollars and operating periods of more than 10 years.

Upon the application of the enterprise and the approval of the tax authorities of the special economic zone, from the beginning of the profit-making year, the tax is exempted in the first year and the corporate income tax is halved in the second and third years .

2. For foreign banks, Sino-foreign joint venture banks and other financial institutions established in the special economic zones and other regions approved by the State Council, foreign investors invest capital or branches and the head office allocates more than 10 million US dollars of operating funds with a business period of more than 10 years.

Upon the application of the enterprise and the approval of the local tax authority, starting from the profit-making year, the enterprise income tax is exempted in the first year, and the enterprise income tax is halved in the second and third years.

3. For industries and projects that encourage foreign investment, the people s governments of provinces, autonomous regions and municipalities may decide to exempt or reduce local income tax according to the actual situation.

Taxes payable by foreign companies:

At present, foreign-invested enterprises are subject to 10 taxes including value-added tax, consumption tax, business tax, income tax on foreign-invested enterprises and foreign enterprises, personal income tax, urban real estate tax, vehicle and vessel license tax, stamp tax, resource tax, and land value-added tax.

Leave a Reply

Your email address will not be published. Required fields are marked *