Form the first year wherein they make profit, the foreign-funded production enterprises of which the business term is more than ten years will be exempted from paying corporate income tax during the first year and second year, and will get the corporate income tax halved during the third year, fourth year and fifth year.
However, the preferential policies for foreign-funded enterprises engaged in exploitation of resources such as petroleum, natural gas, rare metal and noble metal will be separately formulated by the State Council. In case the actual operation period of a foreign-funded enterprise is less than ten years, the corporate income tax which has been exempted should be paid.
After the expiration of the legally-specified tax exemption & reduction period, the foreign-funded enterprises engaged in agriculture, forestry and livestock husbandry as well as the foreign-funded enterprises established in economically-undeveloped remote areas may, as applied for by themselves and approved by the tax administration department under the State Council, get their corporate income tax decreased by fifteen percents to thirty percents in the subsequent ten years.
The foreign-funded technically-advanced enterprises will be exempted from corporate income tax for two years and get their corporate income tax halved for subsequent six years.
In any year after the expiration of the tax exemption & reduction period as specified in the tax law, an enterprise of which the products are exported may get its corporate income tax halved if the export volume realized by it in such year accounts for more than 70% of the total production output of such year.
In case a foreign funded enterprise or a subsidiary set up by a foreign enterprise within the territory of China incurs loss in a year, such enterprise or subsidiary may use the income of subsequent year to cover such loss; in case the income realized in the next taxable year is not enough to cover the loss, the income realized in subsequent years (no more than five years) may also be used to cover the loss.
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If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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