Ø         Enterprise Income Tax

1．  Western Development Policy

         a). For the industry encouraged by the State, 15% of Enterprise’s income tax is levied. 
(Note: The foreign-funded enterprises encouraged by the Chinese government refer to those listed in the Guidelines on Foreign-Funded Enterprises and the List of Foreign-funded Advanced Enterprise of Guangxi and the enterprises’ main business accounts for >70% of their total income.)

b). For enterprise, units and people from outside Guangxi to set up solely owned enterprises which are in accordance with the State’s industrial policies, the income tax is exempted for five year started from the date of operation.

c). Manufacturing enterprise encouraged by state enjoys the income tax policy of 3 years exemption and 2 years half reduction started from the date of operation

2．Incentives by the Beihai Industrial Zone

From the date of operation, an In-zone enterprise, when enjoying the relevant preferential tax policies offered by the state and Province, can receive a 10-year special support from the enterprise technology upgrading and R&D fund. This fund pooled from the local fiscal revenue, is aimed to support the enterprises to expand their reproduction. Among the 10 years, the annual amount of the special fund support for the first 5 years is equal to that of the local share of the income tax of the year paid by the enterprise, and that for the second 5 years, half of the income tax of the year paid by the enterprise.

3．Encouraged Policies for the manufacturing enterprise with foreign investment

For those with an operation period of over 10 years, enterprise’s income tax is exempted for the first and the second year and 50% of the income tax is exempted for the following three years started from the profitable year. (Short for ‘two years exemption and three year reduction’)

4．Preferential policies for two kinds of enterprises.

a). Advanced Technology Enterprise (which is certified by Guangxi Foreign Investment Management Office) enjoys 50% of income tax reduction for another three years after the preferential policy ‘two years exemption and three year reduction’ according to the state tax law expires and the enterprise is still certified as an advanced technology one.

b). Export-oriented Enterprise (which is certified by Guangxi Foreign Investment Management Office) enjoys 50% of income tax reduction after the preferential policy ‘two years exemption and three year reduction’ according to the state tax law expires if the enterprise’s export value amounts to >70% of its output value.
　

5．Preferential policies for reinvestment by profits.

a). When an enterprise reinvests directly its profits in its own production, increases its registered capital or uses its profits as the capital to run another enterprise with a period not less than 5 years, 40% of the enterprise income tax payment for reinvestment will be returned to the investor after the investor’s application is approved by the taxation authorities.

b). When an enterprise reinvests directly its profits in its own production, expands export or advanced enterprise, increases registered capital with a period not less than 5 years, all the enterprise income tax payment will be returned to the investor after the investor’s application is approved by the taxation authorities.
　

Ø         Customs duty and value -added tax (VAT)

1．Imported Equipment

a). For the foreign-invested enterprises encouraged by the Chinese government, the imported equipment for self-use within the amount of total investment, except for the commodities listed in the List of Non-Duty-Free Imported Commodities for Foreign-Invested Projects, is exempted from import duty and import value-added tax.

b). For the foreign-invested enterprises which export directly all their products, customs duty and import value-added tax will be at first levied on the imported equipment for self-use within the amount of total investment, then 20% returned to the investor annually and all returned within 5 years from the date of production upon the approval of relevant authorities.
　

2．Imported spare parts and raw materials.

The imported goods (including quota goods, specifically registered goods and other goods) for producing export commodities, such as imported spare parts and raw materials, are exempted from customs duty and import value-added tax under customs’ supervision.
　

3．Export of products.

The products produced and exported by the same enterprise are duty free. ‘Tax exemption, offset and rebate (refund)‘ are adopted to manage relevant value-added tax. Tax exemption refers to value added tax on production and sales of export commodities are exempted; tax offset refers to the amount of tax, which is levied on the raw material, spare parts, fuels and energy consumed by the production of export product and shall be returned to the investor, offsets the amount of tax which shall be levied on the domestically-sold product. Tax refund means if the amount of the import duty for the exporting products of the month is more than that of the domestic sales taxes, the balance hereof is refunded.

Ø         Urban Property (Real Estate) Tax

In case a foreign invested enterprise does have difficulty in paying the urban property tax and request to pay a reduced amount or to be exempted, the enterprise may be exempted from or pay a reduced rate of the tax for a certain period (1-3 years) by filling an application to Beihai local taxation bureau and subject to the approval by the provincial local taxation authority.

Ø         Other Preferential Policies 

1．Technology development

If the technology development fund of an enterprise increases more than 10% of the previous year, 50% of the actual technology fund can be used to offset the enterprise income tax payment.

2．Loss offset

Entities set you in China and engaged in production or business operation, which have a profit loss for the year, can offset the loss by using the next year’s income tax. If the next year’s profit cannot make up for the loss, the loss offset can be extended to the following years, but not more than five years.

3．Profit remittance

Foreign investors of an enterprise are exempted from the personal income tax of the amount remitted when remitting out of China their shares of profits from the enterprise.

4．Special fund support

a). Project incubating fund

A project-incubating fund is set up in the zone through the rolling development of land to provide supporting fund for the incubation of new and high-tech projects in the zone

b). New and high-tech projects special supporting fund

The industrial Zone gives full support to new and high-tech projects to apply for the scientific research funds from the state, provincial and city levels as well as the national science and technology innovation fund.