Several Aspects Of Income Tax Planning For Foreign-Funded Enterprises (2)

In addition to giving the 15% and 24% low tax rates introduced above, the company also gives a preferential tax exemption and tax reduction, that is, the so-called "exemption from two reduction of three".

1., for the productive foreign invested enterprises, with a period of 10 years or more, they will be exempt from corporate income tax from first years and second years from the beginning of the profit making period, and the tax will be halved from third to fifth years.

However, the exploitation of oil, natural gas, rare metals, precious metals and other resources shall be separately stipulated by the State Council.

2. foreign investment enterprises engaged in agriculture, forestry and animal husbandry and foreign-invested enterprises in less developed areas shall enjoy 2 years' tax exemption and three years' tax reduction in accordance with the provisions of the tax law. Upon approval of the enterprise application and approved by the State Administration of Taxation, the enterprise income tax can be reduced by 15% to 30% within the next 10 years.

3., a Sino foreign joint venture engaged in port and wharf construction, which has been operating for more than 15 years, has been approved by the tax authorities of the provinces, autonomous regions and municipalities directly under the central government, and has been exempted from enterprise income tax for first to fifth years from the beginning of the profit making year, and is reduced by half to sixth years to tenth years.

4. foreign invested enterprises, such as foreign-invested enterprises engaged in airport, port, wharf, railway, highway, power station, coal mine, water conservancy and other infrastructure projects established in the Hainan Special Economic Zone, and foreign-invested enterprises engaged in agricultural development and operation, whose operation period is more than 15 years, shall be exempted from enterprise income tax from first to fifth years from the beginning of the profit year after the approval of the Hainan provincial tax authorities, and the enterprise income tax shall be reduced by half from sixth to tenth years.

5. foreign invested enterprises in Pudong New Area, Shanghai, which are engaged in energy and pportation construction projects such as airports, ports, highways, railways, power stations, etc., which operate for more than 15 years, shall be exempted from enterprise income tax from first to fifth years after the application of the enterprise and approved by Shanghai tax authorities. The enterprise income tax shall be levied from sixth to tenth years.

6. foreign investment enterprises established in the special economic zones and engaged in service industries, with foreign investment exceeding US $5 million and operating for more than 10 years, shall be exempted from enterprise income tax for first years from the beginning of the profit year by the application of the enterprise and the tax authorities of the Special Economic Zone. The enterprise income tax shall be levied within second and third years.

7.. Foreign investment banks or 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 invested capital or branches from the head office to more than $10 million in operating capital and the business period is more than 10 years. Upon application by enterprises, the local tax authorities approve the enterprise income tax from first years from the beginning of the profit making year, and the enterprise income tax is reduced by half in second and third years.

8., a Sino foreign joint venture set up in the national high and new technology development zone designated by the State Council for a period of 10 years or more, shall be exempted from enterprise income tax for first years and second years from the year when it begins to make profits.

Foreign invested enterprises in special economic zones and economic and technological development zones shall be implemented in accordance with the preferential tax provisions of the special economic zones and the economic and technological development zones.

After the period of exemption from or reduction of enterprise income tax according to the tax law, the export enterprises of foreign invested enterprises held by foreign investment enterprises 9., when the export value reaches 70% of the annual output value of the enterprises, the enterprise income tax can be reduced by half according to the tax rate stipulated by the tax law. However, the export enterprises of the special economic zones and the economic and technological development zones and other enterprises that have already paid the enterprise income tax at the rate of 15% shall comply with the above conditions, and the enterprise income tax shall be levied at the rate of 10%.

10. advanced technology enterprises held by foreign invested enterprises shall be exempted from or reduced to the advanced technology enterprises after the expiration of the enterprise income tax according to the tax law. They can be extended for 3 years in accordance with the tax rate stipulated by the tax law, and the enterprise income tax shall be reduced by half.

In accordance with the provisions of the eighth, ninth and tenth provisions mentioned above, foreign investment enterprises shall apply for exemption from enterprise income tax, and submit the relevant supporting documents issued by the verification and verification department, and be examined and approved by the local tax authorities.

In order to encourage foreign investors to reinvest their profits in China, the tax law reinvested tax rebates in four.

Foreign investment reinvestment refers to the direct use of foreign investors from foreign invested enterprises to increase their registered capital before extracting the profits from the enterprise, or to invest directly in other foreign-invested enterprises after the extraction.

In regard to the reinvestment behavior of foreign investors, China has adopted all or part of the tax refund measures for the original income tax paid by foreign-funded enterprises.

1., all tax rebates will be refunded. Foreign investors will directly reinvest in China to hold export products or advanced technology enterprises, and foreign investors will directly reinvest in the infrastructure projects and agricultural development enterprises of the Hainan special economic zone from the profits gained by enterprises from the Hainan special economic zone. They can refund all the enterprises' income tax paid in part of their Reinvestment in accordance with the regulations.

If a foreign investor holds or expands an enterprise directly invested, it fails to meet the export standard within 3 years from the beginning of production or operation, or if it has not been recognized as an advanced technology enterprise, 60% of the tax refund has been paid back.

The 2. part of the tax refund policy is that the foreign investors of the foreign invested enterprises will directly reinvest the profits from the enterprises, increase their registered capital, or set up other foreign-funded enterprises as capital, with a period of not less than 5 years. They may refund the 40% tax on their reinvested part of the income tax through legal procedures.

If a reinvestment is withdrawn in less than 5 years, the tax already withdrawn shall be paid back.