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2010-05-10

Enterprise income-tax

According to the Enterprise Income Tax Law of the People's Republic of China, which has come into force as of January 1, 2008: enterprise income tax for all domestic and foreign enterprises will be set at 25%. However, enterprise listed below shall enjoy either exemption or reduction. Enterprises whose:

(1) Income comes from agriculture, forestry, animal husbandry or fishing;

(2) Income comes from infrastructure construction projects which are supported by the state;

(3) Income comes from environmental protection, and energy and water saving projects

(4) Income comes from technology transfer which is in accordance with the relevant requirements;

 (5) Non- resident enterprise with an institution or establishment inside China, shall pay enterprise income tax on its incomes derived from inside China as well as on incomes that it earns outside China but which have a real and verifiable connection with the aforementioned institution or establishment.

Meanwhile, all small low-profit enterprises that satisfy relevant criteria shall enjoy a reduced tax rate of 20%; high-tech enterprises which are supported by the state shall enjoy a reduced tax rate of 15%. Detailed information relating to standards and implementation measures will be released by the State Council at a future date.

Enterprises which were set up before the new income tax regulations, if they enjoyed a more favorable tax rate according to the old tax laws and regulations, shall gradually come into line with the new income tax rate in a transitional manner over the course of the next five years after the new law comes into force; if the enterprise have been entitled to fixed-term tax reduction/exemption, they shall maintain these prerogatives until the agreed period expires, but for those enterprises which haven’t yet started their tax exemption or reduction period due to non-profit-making. They shall start from the day the new law comes into force.

Regulations on VAT/Consumption Tax Reduction and Exemption (export rebate)

Tax items

Specific conditions

Reduction and exemption regulations

VAT

Self-produced and equivalent self-produced goods exported by the production type foreign-invested enterprises

VAT shall be exempted in production and sales; the input tax, to be refunded and contained in the consumed raw materials, parts, fuels and power etc, could offset the payable tax of domestic goods. If the input tax to be offset is more than the tax payable of the current month, the balance is refundable after offset.

Consumption tax

Self-produced and equivalent self-produced goods exported by the production type foreign-invested enterprises

Exempt from the consumption tax

Regulations on VAT Reduction and Exemption (sales of self-produced agricultural products and feed)

Tax items

Specific conditions

Reduction and exemption regulations

 

VAT

The foreign-invested enterprises engaged in the industries of planting forestry, livestock husbandry and aquatic products industry, and sales of the self-produced agricultural products, single bulk feed, mixed feed, compound feed, compound premix and concentrated feed.

VAT Exemption

Regulations on VAT Reduction and Exemption (software products and integrated circuit)

Tax items

Specific conditions

Reduction and exemption regulations

 

VAT

Before the end of 2010, for the VAT common tax payers selling their self-developed software products

VAT shall be collected at the statutory tax rate of 17%. For the part over 3% of the actually paid VAT amount, VAT is refundable immediately after collection.   

Regulations on VAT Reduction and Exemption (integrated use of resources)

Tax items

Specific conditions

Reduction and exemption regulations

 

 

 

 

 

VAT

Renovated water, rubber powder and retreated tyre produced with waste type as the sole materials, specific building materials with waste residue no less than 30%, sewage treatment labor. 

Exempt from VAT

The high-purity carbon dioxide products with the industrial waste gas as the raw material, electric power or thermal power with garbage as the raw material, shale oil, regenerated asphalt concrete, cement with waste residue over 30%.

Refund immediately after collection

Some new type wall material products, nitrocellulose for lacquers, power generated with coal gangue, coal slurry, oil shale and wind power, the gypsum, sulfuric acid, ammonium sulfate and sulfur with desulfurization production, the steam, activated carbon, white carbon black, lactic acid, calcium lactate and marsh gas with the waste grain stillage and spent wash as the raw materials of production.

Refund 50% immediately after collection

Integrated use of bio-diesel

Collect and then refund

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