Tax Preferences for Foreign Invested Enterprise
2013-March-14 Source: Newsgd.com
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Enterprise income tax at the rate of 25% is applicable to domestic company and foreign invested enterprise (“FIE”) since the implementation of the Law of Enterprise Income Tax, but FIE may still enjoy some tax preferences.

1. The imported machinery for the project promoted by the Catalogue for the Guidance of Foreign Investment Industries may enjoy preferential treatment of import duty. Besides, the VAT may also be deducted during the business period.

2. The FIE engaging in high-tech industry strongly supported by the government may pay the income tax at the rate of 15%.

3. From July 1, 2010 to December 31, 2013, the FIE which is registered in one of 21 exemplary cities and engages in offshore outsourcing service may be exempt from VAT. And if the FIE is classified as tech-advanced service enterprise, its income tax is 15%.

4. If the qualified foreign research center imports scientific development equipment, the import duty will be exempt, and if it purchases made-in-China equipment, the VAT will be returned. If the research center sells its own technique, the income tax will be exempted. And if the technical development cost increase by over 10% compared to the previous year, 50% of the technical development cost can be deducted from the income tax after the approval by tax bureau.

5. If the FIE in promotional industry, research center, tech-advanced industry or product export industry and uses its own fund (reserve fund, development fund, depreciation cost or net profit) to import equipment, technique, attachment and spare part for self-use, the import duty is relieved.

(This information is provided by Lawyer Kelly Xie from Guangdong KaiTong Law Firm in friendship. It is not any legal opinion or legal grounds addressed to any organization or individual. For inquiry, please contact Kelly via email at Kelly_xie@ktlf.com.cn or by phone on 13926185641.)

Editor: Olivia
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