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Nanchang Company Taxation on Foreign Investment

Nanchang Company Taxation on Foreign Investment - Income Tax
Nanchang company income tax on enterprises with foreign investment is levied at the rate of 33 percent. The income tax on enterprises with foreign investment that are engaged in projects such as energy, communications, port and dock is levied at the reduced rate of 15 percent. 

         

Nanchang Company Taxation on Foreign Investment -Stage Value-added Tax 
a. Tariff rate: Since 1992 the Chinese government has reduced nine times the tariff rate for imported commodities. The present average tariff rate is 12 percent. 
b. Tax exemption for imported equipment: equipment imported for foreign-invested or domestic-invested projects that are encouraged and supported by the state shall enjoy tariff and import-stage value-added tax exemption. 

Nanchang Company Taxation on Foreign Investment -Circulation-Stage Tax 
Since January 1st, 1994, the Chinese government has levied unified value-added tax, consumption tax and business tax on enterprises with foreign investment and domestic enterprises. Technology transfer and technological development by foreign enterprises and enterprises with foreign investment are exempted from value-added tax, as a measure to expand domestic demand and to encourage technological renovation in foreign-invested enterprises. For foreign-invested enterprises engaged in projects in the encouraged or restricted-B categories, the value-added tax on China-made equipment purchased by the enterprises within their total amount of investment shall be fully refunded if the equipment is listed under the catalogue offered with income tariff exemption. 

Nanchang Company Taxation on Foreign Investment -Tax Reduction and Exemption: 
The production enterprises with foreign investment in Nanchang that have an operation period exceeding 10 years shall, from the year they begin to make profit, be exempt from income tax for the first two years and allowed a 50 percent reduction for the following three years. Enterprises with foreign investment engaged in agriculture, forestry and animal husbandry, and enterprises with foreign investment established in remote and underdeveloped areas may, upon approval by the State Bureau of Taxation, be allowed a 15 to 30 percent reduction on the income tax for a period of another 10 years following the expiration of the period of tax exemption and reduction as provided for above. The enterprises with foreign investment that adopt advanced technology shall be exempt from income tax for the first two years and allowed a 50 percent reduction for the following six years. In addition to the two-year tax exemption and three-year tax reduction treatment, foreign-invested enterprises producing for export shall be allowed a reduced income tax rate of 50 percent as long as their annual export accounts for 70 percent or more of their sales volume. The foreign investor of an enterprise with foreign investment which reinvests its share of profit obtained from the enterprise in a project with an operation period of no less than 5 years shall, upon approval by the State Bureau of Taxation of an application filed by the investor, be refunded 40 percent of the income tax already paid on the reinvested amount. 

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If you have further queries in Nanchang Company Taxation on Foreign Investment, don’t hesitate to contact Tannet anytime, anywhere by simply visiting Tannet’s website www.tannet-group.net or www.companies-registry.net or emailing to tannet-solution@hotmail.com, Hong Kong TEL: 852-27826888   China TEL: 86-755-82143422   NANCHANG TEL: 86-791-88188098




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