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Investment Policy

Tax Preferential Policy of Qingdao for Foreign-invested Enterprises

2017-11-21

Corporate income tax
  I.The following enterprises pay corporate income tax at a reduced rate of 15%
  1.Foreign-invested productive enterprises established in the old area of the city where the economic and technical development zone is located and undertaking the following projects (to be approved by State Administration of Taxation):
  (1)Technology-intensive or knowledge-intensive projects;
  (2)Projects with foreign investment of 30 million US dollars and above and longer ROI time;
  (3)Energy, transport and port construction projects;
  2.Sino-foreign joint venture enterprises undertaking construction of ports and wharfs;
  3.Foreign-invested enterprises established in the national hi-tech industry park determined by the State Council and identified as hi-tech enterprises.
  II.Foreign-invested productive enterprises identified as hi-tech enterprises whose operating period is 10 years and above are exempt from income tax during the first and the second profitable years and pay half of income tax from the third year to the fifth year.
  III.Foreign-invested productive enterprises established in the old area of the city where open coastal economic zone, special economic zone in coastal area and economic development zone are located pay corporate income tax at a reduced rate of 24%.
  IV.Foreign-invested productive enterprises whose operating period is 10 years or above are are exempt from income tax during the first and the second profitable years and pay half of income tax from the third year to the fifth year.
  V.Sino-foreign joint venture enterprises undertaking construction of ports and wharfs whose operating period is 15 years and above, after application of the enterprises and approval by taxation authorities of province, autonomous region or directly controlled municipality, are exempt from income tax from the first profitable year to the fifth year and pay half of income tax from the sixth year to the tenth year.
  VI.Foreign-invested product export enterprises, after expiration of the period of exemption and reduction of corporate income tax, if the output of products exported the year is equal to or more than 70% of the total output of the enterprise of the year, can pay half of corporate income tax as per the tax rate stipulated in Tax Law. The product export enterprises enjoying a corporate income tax rate of 15% and meeting the above-mentioned conditions can pay corporate income tax at further reduced rate of 10%.
  VII.Foreign-invested advanced technology enterprises that remain advanced technology enterprises after expiration of the period of exemption and reduction of corporate income tax can continue to pay half of corporate income tax at the tax rate stipulated in Tax Law for another 3 years. The enterprises whose income tax rate is less than 10% after reduction by half shall pay income tax at 10%.
  VIII.The profit earned from foreign-invested enterprises by foreign investors are exempt from income tax.
  IX.All foreign-invested enterprises established in Qingdao Economic and Technical Development Zone and in Hi-Tech Industry Park and having an operating period of 10 years or above are exempt from income tax levied by local tax bureau
Turnover tax
  1. Foreign-invested enterprises established after approval since 1st January, 1994 enjoy export tax rebates for the goods they produce and export according to relevant regulations (unless otherwise stipulated by the state).
  Rate of export tax rebate for some goods since 1st January, 1994:
  (1) The rate of export tax rebate for four categories of mechanical and electrical products including machinery and equipment, electric appliances and electronic products, means of transportation, instruments and apparatuses is uniformly increased to 17%; the rate of export tax rebate of agricultural machinery increased to 13%. The rate of export tax rebate of the above-mentioned products is the same as their statutory VAT rate.
  (2) The rate of export tax rebate for textile raw materials and products, horologes, shoes, ceramics, steel materials and products and cement is uniformly increased to 13%;
  (3) The rate of export tax rebate for organic and inorganic chemical materials, paints, dyes and pigments, rubber toys and sports, plastic products, travel accessories, luggage and bags is increased to 11%;
  (4) The rate of export tax rebate of goods of which original export tax rebate rate was 6% is uniformly increased to 9%;
  (5) The rate of export tax rebate of agricultural products is uniformly increased to 5%.
  Other exported goods continue to execute the current rates of export tax rebate. The execution date is the date of departure from customs indicated in the Goods Declaration for Exportation (export tax rebate coupon).
  2. The products produced or processed and sold by foreign-invested enterprises in the bonded area are exempt from VAT and consumption tax unless otherwise stipulated by the state. If the processed products are exported or depart the bonded area, the tax paid in China for raw materials can be rebated or exempt.
Duty and import VAT
  Since 1st January, 1998, the equipment imported for domestic-invested projects or foreign-invested projects encouraged by the state are exempt from duty and import VAT within stipulated scope. See details below:
  Scope of duty and import VAT exemption for imported equipment:
  1. For the foreign-invested projects classified as encouraged category or restricted category in the Guiding Catalog of Foreign-Invested Industries and concerning transfer of technology, the equipment imported for own use and included in the total investment amount is exempt from duty and import VAT except the goods listed in Catalog of Non Duty-Free Imported Goods for Foreign-Invested Projects. This clause applies to the imported equipment supplied without price by foreign businessmen for processing trade.
  2. For domestic-invested projects included in the Catalog of important industries, products and technologies encouraged by the state, the equipment imported for own use and included in the total investment amount is exempt from duty and import VAT except the goods listed in Catalog of Non Duty-Free Imported Goods for Domestic-Invested Projects.
  3. The technologies, accessories a the equipment imported for own use and included in the total investment amount is exempt from duty and import VAT except the goods listed in Catalog of Non Duty-Free Imported Goods for Foreign-Invested Projects.nd spares imported with the equipment as per contract for the above-mentioned projects are also exempt from duty and import VAT.

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Management Committee of Qingdao National High-tech Industrial Development Zone ICP:09087849