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Taxation: preferential taxation policies

2010-05-11

* Preferential Tax Policy in Dalian

Unique Location Advantage

Dalian is not only the earliest coastal area opening to the outside world, but also the Northeast Old Industrial Base, enjoying numbers of preferential tax policies. Its prominent location is superior to any other area.

As a coastal opening city, Dalian enjoys a preferential policy regarding income tax. The income tax rate for foreign-invested productive enterprises in the Development Zone is 15%, and for businesses in other regions (except Changhai County) is 24%, with tax relief executed regularly. Enterprises gain universal benefits. The actual income tax rate imposed on foreign-invested enterprises in Dalian in the year 2003 was only 10.01%, which was lower than 3/1 of the legal level and far below the national average (14.21%) as well.

As a Northeast Old Industrial Base, Dalian enjoys an expanded scope offset for VAT, and also a favorable policy on accelerated depreciation for fixed assets and intangible assets. In particular, the policy on the expanded scope of offset for VAT, as a special strategy produced by the state to revitalize the northeast old industrial base, will significantly reduce the enterprises’ VAT burdens. Accelerated depreciation allows the enterprises to pay the duty later, which brings substantial benefits and convenience in cash to enterprises.

Integration of both these two preferential tax policies makes the other regions fall far behind Dalian in terms of location advantage.

Wider and longer-term preferential policy of local income tax

Local income tax shall be determined to levy by the provincial government as stipulated by Tax Law. All foreign-invested enterprises in Dalian are allowed from the first year of profit to be exempted from this tax for 7 years. Enterprises involved in projects encouraged by Dalian Municipal Government shall be exempted from local income tax for another 3 years. This preferential strength is enticing nationwide.

Industrial parks of various types and functions

Dalian has created full set of industrial parks, such as Eco-Tech Development Zone, High-Tech Industrial Zone, Free Trade Zone, Export Processing Zone, Tourist Resorts, Bonded Logistics Park and others. Enterprises enjoy reduction and exemption of income tax and also convenience in importing and exporting cargo.

All categories of favorable tax policies are executed under relevant laws.

Various foregoing tax preferences are given by the state pursuant to applicable laws or stipulated by Dalian Municipal Government in accordance with laws within the scope authorized by the state. Competent authorities shall not exceed their specified authority to relieve the taxes and shall implement administration, impose taxes, deduct the taxes according to the law, and shall keep the policy stable.

 

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