Provisional Regulations for Special Economic Zones and 14 Coastal Cities on Reduction and Exemption of Enterprises Income Tax and Consolidated Industrial and Commercial Tax by The State Council of The People's Republic of China

Provisional Regulations for Special Economic Zones and 14 Coastal Cities on Reduction and Exemption of Enterprises Income Tax and Consolidated Industrial and Commercial Tax by The State Council of The People's Republic of China

Provisional Regulations for Special Economic Zones and 14 Coastal Cities on Reduction and Exemption of Enterprises Income Tax and Consolidated Industrial and Commercial Tax by The State Council of The People's Republic of China

Guo Fa [1984] No. 161

November 15, 1984

In order to facilitate the expansion of foreign economic cooperation and technical exchange, the use of foreign investment and the transfer or license of advanced technology for the purpose of expediting the socialist modernization program, the following regulations are hereby formulated to grant reduction and exemption of enterprise income tax and consolidated industrial and commercial tax (hereinafter referred to as CIC tax) to joint ventures, cooperative enterprises and wholly foreign-owned enterprises operated by companies, enterprises or individuals (hereinafter referred to as "overseas business people") from foreign countries, Hong Kong or Macao in the four special economic zones of Shenzhen, Zhuhai,Xiamen and Shantou, and the 14 coastal port cities of Dalian, Qinhuangdao,Tianjin, Yantai, Qindao, Lianyungang, Nantong, Shanghai, Ninbo, Wenzhou,Guangzhou, Zhanjiang and Beihai.

I. Special Economic Zones
1. A 15 percent preferential enterprise income tax shall be levied on the income derived from production, business and other sources by any joint venture, cooperative enterprise or wholly foreign-owned enterprise(hereinafter referred to as "special zone enterprise") operating in the special economic zones (hereinafter referred to as "special zones").
(1) For enterprises engaged in industry, communications and transport,agriculture, forestry and livestock breeding, which have a contract life of 10 years or longer, a two-year tax holiday commencing from the first profit-making year is granted followed by a 50 percent reduction from the third to the fifth year, upon application and approval by the special zone tax authorities.
(2) An enterprise engaged in the service trade,
which has overseas investment exceeding US $ 5 million and a contract life of 10 years or longer, income tax shall be exempted in the first profit-making year,followed by a 50 percent reduction in the second and third year, upon the application and the approval by the special zone tax authorities.
2. Reduction or exemption of local income tax for special zone enterprises shall be decided upon by the people''s governments of the special zones.
3. Overseas business peoples in joint ventures in the special zones are exempted from enterprise income tax when repatriating profits derived therefrom.
4.
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