Overseas-funded enterprises in Shijiazhuang City enjoy all the preferential policies of our nation as well as our province. Simultaneously, as for the large amount of overseas investment, we adopt more flexible policy. That is, even for one such case, a discussion will be held. Or a special case will be dealt with under special condition.
TAX FAVORABLE POLICIES
Value-added tax and operation tax
Unless otherwise stipulated, the practice of tax exemption, low tax or tax drawback shall be followed for the goods and commodities produced by the overseas-funded enterprises when they are exported by the enterprise itself or by the foreign trade organization. The value-added tax related with production enterprise itself. The included returnable purchase tax on the raw materials, parts, fuels and power consumed to produce exported-oriented-goods and commodities shall offset the payable tax on goods and commodities sold on the domestic market. When the amount of purchase tax exceeds that of the payable tax within a month, the surplus shall be returned to the overseas-funded production enterprise.
As for export goods produced, he foreign-funded enterprise will be returned for the export tax paid at the taxation authority accompanied by the relevant documents.
If the foreign-funded enterprise purchased the home-made equipment (made in China) with in the total investment, and this equipment is in List of the Tax-free Products, the Company will be returned for all the value-added tax paid for the same equipment at the taxation authority.
When the overseas-funded enterprises encouraged by "Directing List of Overseas Investment" purchase home-made equipments within ratified quota, if the equipments don t belong to the "Non Tax-exempted Import Commodities Catalogue for Over-seas-funded Projects" or "Non Tax-exempted Import Commodities Catalogue for Domestic-funded Projects", the enterprises will be returned all the value-added tax paid for the same equipment at the taxation authority.
As for income from research and development center established by overseas-funded enterprises or overseas investors, income from the technology transfer by overseas enterprises of foreigners, income from technology development or concerned technological consultation and services, the operation tax can be exempted with the approval of taxation authority.
Enterprise Income Tax
The productive foreign-funded enterprise, with their tenure over 10 years, will be exempted from the enterprise income tax in the first two years, while half of this tax will be exempted in the following three years.
Under the approval of the State Council taxation authority and at their own application, those foreign-funded enterprises encouraged in agricultural, forestry and husbandry industry, with tenure of over 10 years, will, at the expiration of the tax-free and tax exemption period, still enjoys 15 to 30 discounts on the enterprise income in the following 10 years.
Export-oriented enterprises sponsored by the overseas investors, at the expiration of the tax-free and tax exemption period, are entitled to pay only half of the enterprise income tax regulated in the Tax Act, on the condition that the output value of their exports reach 70 of the total of the enterprise. As to those rates below 10 after this 50 exemption, they will be regarded as the rate of 10
The technologically-advanced enterprises sponsored by the overseas investors, which remains technologically-advanced at the expiration of their tax-free and tax exemption period, are entitled to pay only half of the enterprise income tax for an extra period of three years, according to the Tax Act.
Under the approval of the taxation authority and at their own applications, foreign investors who reinvest the profit derived from the enterprises as an additional in the same enterprise or in another foreign-funded enterprise as an floating capital with a tenure no less than 5 years, will be returned 40 of their income tax paid for the capital reinvested. As for those foreign investors, who directly reinvest in China, using their profit share derived from the enterprises to sponsor or to expend the export-oriented and technologically-advanced enterprises with a tenure no less than 6yers, will be 100 refunded the enterprise income tax paid for the capital reinvested.
The productive and managerial enterprises, institutes and entities sponsored by the foreign enterprises in China, are authorized to make up the loss occurred in the previous fiscal year with the income of the following fiscal year. The loss-make-up procedure will go on continuously for a period of no more than 5 years.
Under the approval of the State Tax Bureau, the foreign-funned productive enterprise built in Shijiazhuang and undertaking the items mentioned below, will enjoy a 15 tax rate for enterprise income tax.
---Technology-intensive and intellectual-intensive projects;
---foreign investment exceeding USD 30 million and, with a long pay-back period.;
---Energy, traffic and port construction projects.
The foreign-funded productive enterprise, set up in Shijiazhuang, all enjoy a 24 tax rate for the enterprise income tax.
The foreign-funded productive enterprise, set up in Shijiazhuang High-New-Tech Industry Development Zone and authenticated as a High-New-Tech enterprise, will enjoy a 15 tax rate for the enterprise income tax.
If a foreign enterprise transfers technology to a company in China, and the technology is advanced or transferred on favorable terms, the foreign enterprise shall be exempted from the income tax after being approved by the taxation authority of the State Council.
If the technological development fee spent by the foreign-funded enterprise increases by more than 10 (including 10 ) compared with that of same period of last year, the company shall enjoy another 50 discount on the payable income tax of the present year, calculated at the actual amount occurred of technological development fees, under the approval of the taxation authority.
If the overseas-funded enterprise and foreign enterprise purchased a set of domestic equipment that is not included in the catalogue for tax-free equipment, they may offset, with 40 of the total investment on same equipment, the increment of enterprise income tax than the former year when the equipment were purchased. If it is not enough to offset, the margin can continue to be offset within 5 years since the year that the equipments are purchased.
Customs Duties and Import-related Tax
As for the foreign-funded projects in which the technology is transferred and, belonging to the encouraged projects in the national "Directing List of Industries for Foreign Investment", except the items listed in "Catalogue of Imported Commodities Not Exempt from Taxation for Foreign-funded Project", the equipment, purchased within the total investment for the Project, shall be exempt from the customs duties and import related tax.
The foreign-funded projects, belonging to the encouraged projects and the restricted Grade-B projects, and that have been approved in accordance with the "Directing List of Industries for Foreign Investment" as of April 1, 2002, shall continue to enjoy the preferential policies on tax.
In the technical transformation of the foreign-funded enterprise, the foreign-funded Research & Development Center, the technologically-advanced and export-oriented enterprises that have already established and belonging to the encouraged projects and the restricted Grade-B projects, the equipment, which are obtainable at the domestic market or the performance of same home-made equipment can not meet the requirements, and its auxiliary parts and spare parts as well as the related technology, imported within the approved business scope, shall be exempt from the customs duties and import related tax, according to the relevant regulations.
As for overseas-funded research and development centers, if they import equipments which are not obtainable at the domestic market or the performance of same home-made equipments can not meet the requirements, and its auxiliary parts and spare part as well as the related technology, the equipments shall be exempt from customs duties and import related tax, according to the relevant regulations.
OTHER PREFERNTIAL POLICIES
a. As for the overseas-funded enterprises, if their fixed assets need depreciating, the depreciation can be done with acceleration with the enterprises application, and the approval from Taxation Authorities.
b. If the overseas-funded enterprises employ laid-off workers, which come up to more than 50 of the total employees, the enterprises can enjoy preferential policies for labor and service enterprises, with the confirmation from labor and insurance authorities, and the approval from the taxation authorities.
c. If the overseas investors invest to renovate or develop the abandoned or deserted land, the investors are entitled to volunteer use or onerous use the land at a favorable price or volunteer within 50 years.
d. The overseas-funded enterprises, the technologically-advanced and export-oriented enterprises, the overseas-funded projects of construction of infrastructure or renovation of the old city zone, which obtain their land using right, can be exempt from the land using fees.
e. The overseas-funded enterprises established jointed by overseas investors with non-governmental enterprises enjoy the same treatments as enjoyed by overseas-funded enterprises established jointed by foreign investors and state-operated enterprises.
f. Unless specially stipulated by our country or province, all the administrative charge items that involve overseas-funded enterprises will be levied according to the lowest rate if there is fluctuation; the overseas-funded projects of construction infrastructure and the renovation of the old city zone, with a large amount of investment and a long term of reimbursement, the administrative charge can be delayed, deducted and exempt, with the approval from the municipal government.
g. Foreigners investing or working in Shijiazhuang, their spouses and children can be granted residence certificates with tenure of 1 to 5 years by the Emigration & Immigration Administrative Authorities according to their demands, certain conditions and the law. Some of them can be given long-term residence certificates with their application according to the relevant national stipulations.
h. Foreign staff can enjoy the same treatments as enjoyed by the local citizens in terms of residence, shopping and purchase of assets, seeing a doctor, and their children going to school with effective credentials.
