Tax

The rate for the deduction of the expenses before individual income tax of the owners of family proprietorships and of investors in wholly individually-owned enterprises and partnerships is uniformly set at Rmb24,000 per year (Rmb2,000 per month).

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Return of leaseholds exempted from business tax.

Foreign enterprises pay income tax according to the Gregorian calendar year.

Stricter recognition standards for hi-tech enterprises.

Transitional preferential tax treatment for hi-tech enterprises issued in view of the Enterprise Income Tax Law.

The Measures set forth the criteria for recognition as a hi-tech enterprise. After obtaining qualifications as a hi-tech enterprise, the enterprise is entitled to tax reduction or exemption.

Earlier this year the Ministry of Science and Technology, the Ministry of Finance and the State Administration of Taxation issued a circular containing new Measures on HNTE Recognition. These measures, along with a Catalogue of supported industries, detail HNTE recognition requirements and necessary administration procedures under the PRC Enterprise Income Tax Law.

Tax refund policy for reinvestments by foreign investors clarified.