National incentives

摘要

The Corporate Income Tax Law of 2008 fundamentally changed the tax regime for foreign-invested enterprises (FIEs) in China, reining in their preferential treatment for the purpose of encouraging the development of local businesses. Along with the Detailed Implementation Regulations of 2007, the law set a unified 25% tax rate for both FIEs and domestic companies. Previously, a 15% rate applied to the former and a 33% rate to the latter. The Provisional Regulations on Value-added Tax (VAT) of 2009 abolished VAT exemptions that FIEs had enjoyed for imported equipment used in technological upgrading. The rules also ended a VAT refund policy for domestically produced equipment acquired by FIEs. As part of the regulations, companies are allowed to deduct input VAT for fixed assets that they have purchased.