Interim Provisions of Ministry of Finance of the People's Republic of China concerning Reduction and Exemption of Enterprise Income Tax and Industrial Consolidated Tax for the Encouragement of Foreign Investment in China's Open Coastal Economic Areas

Interim Provisions of Ministry of Finance of the People's Republic of China concerning Reduction and Exemption of Enterprise Income Tax and Industrial Consolidated Tax for the Encouragement of Foreign Investment in China's Open Coastal Economic Areas
Interim Provisions of Ministry of Finance of the People's Republic of China concerning Reduction and Exemption of Enterprise Income Tax and Industrial Consolidated Tax for the Encouragement of Foreign Investment in China's Open Coastal Economic Areas

Cai Shui Zi [1988] No.91

June 15, 1988

The interim provisions is formulated in respect of reduction and exemption of enterprise income tax and industrial and commercial consolidated tax for foreign investors in order to promote the economic and technological exchange, absorb the foreign investment, import foreign technology and accelerate economic development in China''s open coastal economic areas, namely the East Liaodong Peninsula,Shandong Peninsula, Yangtze river delta, Zhujiang river delta and a triangular area in south Fujian comprising Xiamen, Zhangzhou and Quanzhou. It reads as follows:

I. Subject to approval by the Ministry of Finance,the productive enterprises established by foreign investors in China''s open coastal economic areas (hereinafter referred to as open area enterprises) shall pay their enterprise income tax at a preferential tax rate of 15% if they satisfy any one of the following conditions:
(1) they are technology-intensive or knowledge-intensive enterprises;
(2) the foreign investors have contributed more than US$30 million of investment to the enterprise and is expected to take a long time to recoup their investment, and
(3) they are engaged in energy,transport and port construction projects.
Subject to approval by the Ministry of Finance, open area enterprises engaged in the following lines of business but are not qualified under the requirements set in the preceding paragraph may pay their enterprise income tax at a 20% discount:
1.
  ......
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