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Tax Preference Policy

Author:佚名  From:Investment Information Network of Guizhou Time:2013-09-29 Browse:  Size: Big Middle Small

Corporate income tax for industrial enterprises encouraged in Guizhou will levied as per the tax rate of 15%

Companies with investment and operation income from state-supported infrastructure projects as well as proper environmental protection, energy conservation and water conservation projects are entitle to the preference of "three exempted items and three halved items" in corporate income tax as per laws and regulations.

Within a stipulated scope, the tariff of imported equipment whose price is within the total investment amount directly for encouraged industries with investment from the western regional and foreign business as well as competitive industries in western China can be exempted. Note (1)

As stipulated by the state, preferential policies regulated by provincial government is provided at the largest extent for private companies.

Eligible private companies are entitled to tax exemption or reduction as stipulated by the policy.

Except for tax-related items require approval of provincial taxation authorities as stipulated by laws, regulations or rules issued by State Administration of Taxation, the other tax-related items are to be handled by corresponding local authorities. Note (4)

For private companies with more than 30 million RMB of annual increase in sales income, the government aid at more than 20% of the increase is provided. Certain amount of local government subsidy is provided for small-scale private companies which have submitted application after tax and approved by the taxation administrative department. Note (4)  

Companies are allowed to deduct payable taxes with 150% of the actual technical development expenses during the year. The deduction exceeding the annual limit can be carried to the next 5 years as per Taxation Law.

For companies with personnel education fund within 2.5% of total taxable salary, the fund can be deducted prior to enterprise income tax.   

Instrument and equipment for R&D with less than 0.3 million RMB of unit price can be calculated into administrative cost by one or several times, among which those reaching the level of fixed asset shall be managed separately without depreciation allocation. If the unit price exceeds 0.3 million RMB, the depreciation period of fixed assets can be shortened, otherwise accelerated depreciation can be allowed.

For company technology center, national engineering (technology research) center, etc. that conform to national regulations, their imported scientific R&D product can be relieved from import tariff and import VAT as stipulated. Note (23)

For venture capital enterprise investing in unlisted medium and small high-tech companies through equity investment for more than 2 years (24 months), the enterprise's payable income tax can be deducted by 70% of the investment amount since the second year of holding the equity, given that the investment is conforming to the Notification of State Administration of Taxation Regarding the Implementation of Income Tax Preference for Venture capital Enterprises (GSF [2009] No. 87). The deduction exceeding the annual limit can be carried to the following years.

As for operation and other income of venture capital enterprises and venture capital management enterprises founded with limited partnership, the income tax shall be paid respectively by each partner.

For venture capital enterprises seek for financing by listing and conforming to Notification of Ministry of Finance and Other Ministries Regarding Exempting the Obligation of Transferring State-owned Shares by State-owned Venture Capital Organizations and Guiding Funds (CQ [2010] No. 278), active assistance in equity transferring procedures shall be provided.

Since the first day of paying its business tax, a fund management organization is entitled to tax return at a full amount of the locally retained tax amount by the local financial department for the first two years, and a half of the amount in the next three years. Note (6)

If a company's actual R&D expense in one taxable year for the purpose of developing new product, new technology and new process does not constitute intangible assets when calculated into current profit/loss, the actual deduction can be increased by 50% of the R&D expense as stipulated. For the expense constituting intangible assets, the amortization can be calculated by 150% of the cost of intangible assets.

For eligible technology transfer income, the portion not exceeding 5 million Yuan in a taxable year can be relieved from income tax, and the tax for the portion exceeding 5 million Yuan is to be halved.

For investment and operation income of companies engaged in projects conforming to Catalogue of Enterprise Income Tax Preference for Infrastructure Projects and Catalogue of Enterprise Income Tax Preference for Environmental Protection, Energy and Water Conservation Projects , the enterprise income tax from the first to the third year is exempted (halved from the fourth to the sixth year) since the taxable year during which the first production/operation income is gained by the project. For procured environmental protection and energy/water conservation equipment conforming to Catalogue of Enterprise Income Tax Preference for Environmental Protection Equipment , Catalogue of Enterprise Income Tax Preference for Energy/Water Conservation Equipment and Catalogue of Enterprise Income Tax Preference for Safe Production Equipment , 10% of the equipment investment amount can be calculated to deduct the taxable amount in the current year. The deduction exceeding the limit can be carried to the next 5 taxable years.

According to the Administrative Measures for Approval of High-tech Company issued by the Ministry of Science and Technology, the Ministry of Finance and the National Administration of Taxation, the income tax rate of approved (reexamined) qualified high-tech companies can be decreased to 15% as per the law of enterprise income tax and its enforcement regulations since the year of approval (reexamination).

Except provided by the tax law, relevant departments shall not require Liquor manufacturers to pay any tax or due in advance by the means of prepayment, etc., or increase the financial burden on the enterprise. Note (17)

The government will actively guide traditional Chinese medicine processing enterprises to establish and improve accounting and certify qualified enterprises as general VAT payers, enabling them to enjoy agricultural products deduction policy.

Enterprises engaged in preliminary processing of medicinal plants and specialty foods as provided by the tax law may pay no or reduced corporate income tax. Note (18)

The government will empower each industrial park to handle the introduction of major projects on the principle of "one approach for one case” and support investors in local taxes and other factor supporting policies. Note (6)

Where Liquor manufacturers’ fixed assets need accelerated depreciation due to technological progress, rapid product upgrading or years’ strong vibration and high corrosion, the depreciation term may be shortened or the accelerated depreciation method may be applied.

Liquor manufacturers purchasing goods or receiving taxable services or assuming the following input taxes may enjoy deduction from the output tax: the amount of VAT on VAT invoice obtained from the sellers; the amount of VAT on Customs Import Duty Pay-In Warrant obtained from the customs; in addition to obtaining a VAT invoice or Customs Import Duty Pay-In Warrant for purchase of agricultural products, input VAT calculated in accordance with the purchasing price on agricultural procurement invoice or sales invoice and a deduction rate of 13%; for payment of transportation expenses in the process of purchase, sale or production, input VAT calculated according to the amount of   transportation expenses on the transportation expenses settlement documents and a deduction rate of 7%.

Liquor manufacturers selling steam, active carbon, white carbon black, lactic acid, calcium lactate and biogas made of waste distillers’ grains and wastewater may enjoy immediate refund of 50% of VAT, provided that waste distillers’ grains and wastewater account for at least 80% of the raw materials .

Any liquor manufacturer selling distillers’ grains that belong to single bulk feed will be exempted from VAT, however, provided that the manufacturer has obtained a feed quality certification issued by a feed quality testing organization with metrological certification qualifications and reported to a competent tax authority.

When determining the minimum tax price of liquor consumption tax, relevant departments will give full consideration to support for the development of Guizhou’s liquor industry and other factors. Liquor manufacturer with annual sales of 10 million RMB or less will be levied at 50% in the range of 50% -70% specified by the State Administration of Taxation.

Where a liquor manufacturer (general taxpayer) with import & export operation rights exports or a liquor manufacturer (general taxpayer) without import & export operation rights entrusts export an agency to export, such liquor manufacturer will be exempted from excise duty for export goods and enjoy exemption, set-off and refund of VAT. Where a liquor trading enterprise (general taxpayer) with import & export operation rights exports, excise duty for export goods will be refunded to the liquor trading enterprise and the liquor trading enterprise will enjoy exemption, set-off and refund of VAT. Where a liquor manufacturer (small-scale taxpayer) with import & export operation rights exports, the liquor manufacturer will be exempted from VAT and excise duty for export goods.


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