tjftz@adm.tjftz.gov.cn 86-22-84906611
Some Preferential Policies for Investment Expansion of Foreign-Invested Enterprises
1.Should a foreign-invested enterprise use its own profits for capital expansion, including increasing directly its own registered capital or investing in another foreign-invested enterprise in Tianjin,if the invested enterprise's remaining operation period is not less than 5 years, the foreign investor or the Chinese investor shall be refunded of the the business income tax already paid for the re-invested part for the year.If the invested enterprise is a technology-advanced enterprise or export-oriented enterprise, the full amount of the above mentioned part of tax shall be refunded; in case the invested enterprise does not meet either of the above-mentioned conditions, 40% of the tax shall be refunded.
2.For the investment expansion of production enterprises that have more than 10 years of remaining operation periods, no matter what the source of increased capital is, the benefits realized from the increased investment, favorable business tax policies shall apply as for newly established enterprises.In cases where the profit and loss of increased part of investment can be computed,since the profit-making year, the business income tax over the new profits shall be exempted for two years and discounted for the following three years;in cases where the profit and loss of increased part of investment cannot be computed,since the year of investment expansion,taking the profits of the previous year as the base figure, according to the proportion of increased part against the total capital, the business income tax over the new profits shall be exempted for two years and discounted for the following three years.Tax to be exempted over the new profits made by increased capital = (increased capital / gross capital after being increased)X(taxable profits of the year-taxable profits of the year before capital increase)X tax rate applicable for the year
3.Foreign investors who have purchased the SMEs in Tianjin shall enjoy priority under the same conditions for the preferential policies of enterprise net assets value deduction that is regulated in Tianjin, as a result, the purchase cost shall be decreased for the foreign investors.The deductable enterprise net assets value items are:
(1)Medical expenses for the retirees who were on the payroll before enterprise restructuring (calculated on the basis of the average medical expenses of retirees, retnum of the enterprise, and the life expectancy period of 15 years for the retirees in Tianjin);
(2)Pension cost for the survivors in the families of the employees deceased on duty who were on the payroll before enterprise restructuring;
(3)Salary for personnel categorized "off-staff" for long sick leaves, occupational hazards, mental illness and getting disabled on duty, and whom have been identified as personnel who have lost labour ability by the Labor Appraisal Committee, calculated basing on the salary one year before enterprise restructuring, and to the mandatory age for retirement;
(4)Social security expenses and salary that were not included in the cost and unpaid before enterprise restructuring;
(5)Cost not included in the overall retirement plan for the employees on the payroll and retirees before enterprise restructuring (calculated on the basis of RMB900 per person and and the life expectancy period of 15 years for the retirees in Tianjin);
(6)Settlement fees for the redundant employees, calculated on the basis of 20% of employees on the payroll before enterprise restructuring, and the wage standards as the average salary of employed workers of the previous year in Tianjin. The above-mentioned deductables shall be preserved in the account payable of the enterprises to be purchased. Whenever the above-mentioned costs are actually incurred,payment shall be made from the account payable, only when the amount is insufficient can it be disbursed from the cost and expenses.
4.The foreign-invested investment companies and consultant companies with operation periods of over 10 years are entitled to the preferential business income tax policies of "exemption for the first year and discounted rates for the following two years".
5.To apply for the reimbursement of business income tax, the current fiscal management system and budgetary levels shall be complied with, and the applications shall be submitted to Tianjin Bureau of Finance and financial bureaus of districts and counties.The following materials shall be provided
1Written application for business income tax reimbursement;
(2)Approval form for income tax reimbursement;
(3)Duplicates of the financial registration certificate of the investing enterprise and the invested enterprise;
(4)Auditor's report and capital verification report issued by Certified Public Accountants in China;
(5) Other materials required by the financial authority in charge.
6.Account settlements when reimbursed tax payment is received
(1)When a foreign-invested enterprise has received the reimbursed tax payment, debit:Bank deposit, credit:Undistributed profit
(2)When a Chinese investor has received the reimbursed tax payment,debit:Bank deposit,credit:Capital reserve
All Copyright Reserved by Tianjin Port Free Trade Zone Administrative Committee
Administration Building No.166,XiSan RD,Tianjin Port Free Trade Zone Administrative Committee,Tianjin,China 300381
Tel:+86-22-84906611,Fax:+86-22-84906611 E-mail:tjftz@adm.tjftz.gov.cn
Web Design by- www.enorth.com.cn