Article 69 The special economic zones mentioned in the first paragraph of Article 7 of the Tax Law refer to the Shenzhen, Zhuhai, Shantou, Xiamen and Hainan special economic zones established according to law or approved by the State Council. Economic and Technological Development Zone refers to the economic and technological development zone established in coastal port cities with the approval of the State Council.
Article 70 The coastal economic open zones mentioned in the second paragraph of Article 7 of the Tax Law refer to the cities, counties and districts approved by the State Council as coastal economic open zones.
Article 71 The collection of enterprise income tax at the reduced rate of 15% mentioned in the first paragraph of Article 7 of the Tax Law is limited to the income obtained by enterprises engaged in production and business operations in the corresponding areas as stipulated in the first paragraph of Article 7 of the Tax Law.
The reduction of enterprise income tax at the rate of 24% mentioned in the second paragraph of Article 7 of the Tax Law is limited to the income obtained by enterprises engaged in production and business operations in the corresponding areas as stipulated in the second paragraph of Article 7 of the Tax Law.
Article 72 The productive foreign-invested enterprises mentioned in the first and second paragraphs of Article 7 and the first paragraph of Article 8 of the Tax Law refer to foreign-invested enterprises engaged in the following industries:
(1) machinery manufacturing and electronic industry;
(2) Energy industry (excluding oil and gas exploitation);
(3) Metallurgical, chemical and building materials industries;
(4) Light industry, textile and packaging industries;
(5) Medical devices and pharmaceutical industries;
(6) Agriculture, forestry, animal husbandry, fishery and water conservancy;
(7) Construction industry;
(eight) transportation (excluding passenger transport);
(nine) scientific and technological development, geological survey, industrial information consultation and maintenance services for production equipment and precision instruments directly serving production;
(ten) other industries as determined by the competent tax authorities of the State Council.
Article 73 The collection of enterprise income tax at the reduced rate of 15% mentioned in the third paragraph of Article 7 of the Tax Law shall apply to:
(1) Productive foreign-invested enterprises established in coastal economic open zones and the old urban areas of cities where special economic zones and economic and technological development zones are located shall engage in the following projects:
1. Technology-intensive and knowledge-intensive projects;
2. Projects with foreign investment of over USD 30 million and long payback period;
3. Energy, transportation and port construction projects.
(2) Sino-foreign joint ventures engaged in port and dock construction.
(3) Foreign-funded banks, Sino-foreign equity joint banks and other financial institutions established in special economic zones and other areas approved by the State Council, but the capital invested by foreign investors or the working capital allocated by the head office of branches exceeds 10 million US dollars, and the operating period is more than10 years.
(4) Productive foreign-invested enterprises established in Pudong New Area of Shanghai, and foreign-invested enterprises engaged in energy and transportation construction projects such as airports, ports, railways, highways and power stations.
(5) Foreign-invested enterprises recognized as high-tech enterprises established in the National High-tech Industrial Development Zone determined by the State Council, and foreign-invested enterprises recognized as high-tech enterprises established in the Beijing New Technology Industrial Development Experimental Zone.
(6) Foreign-invested enterprises engaged in projects encouraged by the state established in other areas specified by the State Council.
The foreign-invested enterprises listed in Item (1) of the preceding paragraph shall be subject to enterprise income tax at a reduced rate of 15% after being approved by the State Taxation Bureau.
Article 74 The term "operating period" as mentioned in the first paragraph of Article 8 of the Tax Law refers to the period from the date when a foreign-invested enterprise actually starts production and operation (including trial production and trial operation) to the date when the enterprise terminates production and operation.
Enterprises with foreign investment that can enjoy the treatment of exemption or reduction of enterprise income tax in accordance with the provisions of the first paragraph of Article 8 of the Tax Law shall report their industries, main product names and determined operating period to the local tax authorities for examination and approval; Without examination and approval, enterprise income tax shall not be reduced or exempted.
Article 75 The provisions promulgated by the State Council before the implementation of this Law mentioned in the second paragraph of Article 8 of the Tax Law refer to the following provisions on exemption or reduction of enterprise income tax promulgated or approved by the State Council:
(1) A Chinese-foreign equity joint venture engaged in the construction of ports and docks, with an operating period of more than 15 years, shall be exempted from enterprise income tax from the first year to the fifth year upon the application of the enterprise and the approval of the tax authorities of the provinces, autonomous regions and municipalities directly under the Central Government where it is located, and the enterprise income tax shall be reduced by half from the sixth year to the tenth year.
(2) Enterprises with foreign investment engaged in infrastructure projects such as airports, ports, docks, railways, highways, power stations, coal mines and water conservancy. Foreign-invested enterprises established in Hainan Special Economic Zone and engaged in agricultural development and management 15 years or more shall be exempted from enterprise income tax in the first year to the fifth year after the application of the enterprise and approved by the tax authorities of Hainan Province, and the enterprise income tax shall be halved in the sixth year to the tenth year.
(3) Foreign-invested enterprises established in Pudong New Area of Shanghai to engage in energy and transportation construction projects such as airports, ports, railways, highways and power stations. If the operating period exceeds 15 years, the enterprise income tax will be exempted from the first year to the fifth year upon the application of the enterprise and approved by the Shanghai tax authorities, and the enterprise income tax will be halved from the sixth year to the tenth year.
(4) A foreign-invested enterprise established in a special economic zone and engaged in the service industry, with foreign capital exceeding US$ 5 million and operating for more than 10 years, shall be exempted from enterprise income tax in the first year upon application by the enterprise and approved by the tax authorities of the special economic zone, and shall be subject to enterprise income tax reduction by half in the second and third years.
(5) Financial institutions such as foreign-funded banks and Sino-foreign joint venture banks established in special economic zones and other areas approved by the State Council, where the capital invested by foreign investors or the working capital allocated by the head office exceeds US$ 10 million and the operating period is more than 10 years, shall be exempted from enterprise income tax in the first year upon the application of the enterprise and approved by the local tax authorities, and the enterprise income tax shall be halved in the second and third years.
(6) A Chinese-foreign equity joint venture established in the National High-tech Industrial Development Zone designated by the State Council and recognized as a high-tech enterprise with an operating period of more than 10 shall be exempted from enterprise income tax in the first and second years upon the application of the enterprise and the approval of the local tax authorities. Foreign-invested enterprises located in special economic zones and economic and technological development zones shall be implemented in accordance with the preferential tax provisions of special economic zones and economic and technological development zones. Foreign-invested enterprises located in Beijing New Technology Industry Development Experimental Zone shall be implemented in accordance with the preferential tax provisions of Beijing New Technology Industry Development Experimental Zone.
(7) After the expiration of the period of exemption or reduction of enterprise income tax in accordance with the provisions of the tax law, if the output value of export products of foreign-invested export enterprises reached more than 70% of the output value of enterprise products in that year, enterprise income tax may be levied at a reduced rate of 50% in accordance with the provisions of the tax law. However, special economic zones, economic and technological development zones and other export enterprises that have paid enterprise income tax at the rate of 15% will still be subject to enterprise income tax at the rate of 10% if they meet the above conditions.
(8) An advanced technology enterprise established by foreign investment, which is still an advanced technology enterprise after the expiration of the period of exemption or reduction of enterprise income tax according to the provisions of the tax law, may be extended for three years, and the enterprise income tax shall be levied at half the tax rate stipulated in the tax law.
(9) Provisions on exemption or reduction of enterprise income tax in other provisions promulgated or approved by the State Council.
When an enterprise with foreign investment applies for exemption or reduction of enterprise income tax in accordance with the provisions of Items (6), (7) and (8) of the preceding paragraph, it shall submit the relevant certification documents issued by the examination and confirmation department, which shall be examined and approved by the local tax authorities.
Article 76 The profit-making year mentioned in Paragraph 1 of Article 8 of the Tax Law and Article 75 of these Detailed Rules refers to the first tax year after an enterprise starts production and operation. If an enterprise loses money at the initial stage of its establishment, it may carry it forward year by year to make up for it in accordance with the provisions of Article 11 of the Tax Law, and the tax year after making up for it shall be the first profit-making year.
The time limit for exemption or reduction of enterprise income tax as stipulated in the first paragraph of Article 8 of the Tax Law and Article 75 of these Rules shall be calculated continuously from the profit-making year of the enterprise, and shall not be postponed due to intermediate losses.
Article 77 If a foreign-invested enterprise starts its business in the middle of a year, but the actual production and operation period is less than six months, it may choose to calculate the period of exemption or reduction of enterprise income tax from the next year; However, the profits made by an enterprise in that year shall be subject to income tax in accordance with the provisions of the tax law.
Article 78 Unless otherwise provided by the State Council, enterprises engaged in the exploitation of resources such as oil, natural gas, rare metals and precious metals shall not be subject to the preferential tax provisions in the first paragraph of Article 8 of the Tax Law.
Article 79 In accordance with the provisions of the first paragraph of Article 8 of the Tax Law and Article 75 of these Detailed Rules, enterprises with foreign investment that have been exempted or reduced from enterprise income tax shall pay back the exempted or reduced enterprise income tax if their actual operating period is less than the prescribed period, except for those that have caused heavy losses due to natural disasters and accidents.
Article 80 The term "direct reinvestment" as mentioned in Article 10 of the Tax Law means that the foreign investors of a foreign-invested enterprise directly use the profits obtained from the enterprise to increase the registered capital before making capital contribution, or directly invest in the establishment of other foreign-invested enterprises after making capital contribution.
When calculating the tax refund in accordance with Article 10 of the Tax Law, foreign investors shall provide certificates that can confirm the year in which their reinvested profits belong; Unable to provide proof, the local tax authorities shall adopt reasonable methods to calculate and determine.
A foreign investor shall, within one year from the date of actual investment of his reinvested funds, apply to the original tax authorities for tax refund with a certificate of capital increase or contribution indicating his investment amount and investment period.
Article 81 The term "the State Council has other preferential provisions" as mentioned in Article 10 of the Tax Law means that foreign investors directly reinvest in establishing or expanding export enterprises or advanced technology enterprises in China. Foreign investors can directly reinvest the profits obtained from enterprises in Hainan Special Economic Zone in infrastructure construction projects and agricultural development enterprises in Hainan Special Economic Zone, and can fully refund the enterprise income tax paid for the reinvested part in accordance with the relevant regulations of the State Council.
When applying for reinvestment tax refund in accordance with the provisions of the preceding paragraph, a foreign investor shall, in addition to handling it in accordance with the provisions of paragraphs 2 and 3 of Article 80 of these Rules, provide a certificate issued by the examination and approval department confirming that the enterprise it established or expanded is a product export enterprise or an advanced technology enterprise.
If an enterprise directly reinvested and expanded by foreign investors fails to meet the standards of export enterprises within three years from the date of operation, or has not been continuously recognized as an advanced technology enterprise, 60% of the tax refund will be returned.
Article 82 The reinvestment tax refund stipulated in Article 10 of the Tax Law and Article 81, paragraph 1 of these Rules shall be calculated according to the following formula:
Tax refund amount = reinvested amount ÷( 1- sum of original actual applicable enterprise income tax rate and local income tax rate) × original actual applicable enterprise income tax rate× tax refund rate.