外商投资企业税收优惠政策TAX PREFERENTIAL POLICY FOR ENTERPRISE WITH FOREIGN INVESTMENTAny foreign enterprise with foreign investment percentage of contribution equaling to or exceeding 25%, applying tax system and registering with the tax authority in accordance with foreign enterprise with foreign investment, shall be applicable for the tax treatment for foreign enterprise with foreign investment, At present, foreign enterprises with foreign investment in Anhui province shall be subject to ten tax categories, including Value -Added Tax, Consumption Tax, Business Tax, Enterprise With Foreign Investment And Foreign Enterprise Income Tax, Individual Income Tax, Urban Real Estate Tax, Vehicle And Vessel Usage License Plate Tax, Stamp Tax, Resource Tax, Land Appreciation Tax. The primary tax preferential policies for enterprise with foreign investment are elaborated below, subject to the existing tax laws and regulations.I. Tax Category PreferenceEnterprises with foreign investment shall temporarily be exempted from City And Township Land Use Tax, City Maintenance And Construction Tax, Educational Surcharge and Local Educational Surcharge.II. Tax Preference for Value -Added Taxa. Importation of materials and equipment directly used in scientific research, experiment and education shall be exempt from VAT.b. Importation of materials and equipment from foreign governments and international organizations as assistance free of charge as well as equipment and machinery required to be imported under contract processing, contract assembly and compensation trade shall be exempt from VAT.c. The exportation of the goods produced and exported by various production enterprises shall be subjectto the method of tax exemption, credit and refund.d. VAT is free on the good self-produced and exported by small taxpayers.III. Tax Preference for Consumption TaxFor taxpayers exporting taxable consumer goods, the consumption Tax shall be exempt.IV. Tax Preference for Business Taxa. Any foreign enterprise which has no establishment or place in China but which derives interest or rentals on the lease of tangible movable property from sources in China, or which, though it has an establishment or place in China, derives such income and the income is not effectively connected with such establishment or place, shall be exempt from Business Tax.b. The income derived from transfer of technology(namely the involuntary conveyance of the ownership or usufruct of patent and non-patented technology with the verification issued by the provincial science department or the contract of technology transfer and the approval document issued by provincial bureau of commerce in charge of examining and approving importation of foreign technology or issued by authorized local bureau of commerce) ，technology development and the relevant technology consultation and technical services by units and individuals, and the income relating to the technology transfer as initial fee and royalty ,obtained in proportion to the sale of the product ,shall be exempt from Business Tax.c. Income from the transfer of equity derived by enterprises with foreign investment and by foreign enterprises shall be exempt from Business Tax.d. If commercial corporations, service corporations(excluding the corporations engaged in advertising, housing mediation, pawn, sauna, massage or oxygen bar ) , processing corporations among labor employment service enterprises ,and small enterprise entities of processing nature in neighborhood or community recruit new memberswho have the preference certificate for re-employment, and sign more-than–one-year contract of labor with them as well as pay social security expenses for them by the law, fix amount of Business Tax and Enterprise income tax shall be deducted in turn in term of the number of the actual recruitment, the deduction standard of which is RMB4800 per head per annum.V. Tax Preference for Enterprise With Foreign Investment And Foreign Enterprise Income Taxa. Any enterprise with foreign investment of a production nature scheduled to operate for a period of not less than 10 years shall, from the year in which it begins to make profits, to be exempted from income tax in the first and second years and allowed a 50% reduction in the third to fifth years.b. Any foreign enterprise which has no establishment or place in China but which derives profits, interest, rental, royalties or other income from sources in China, shall pay an income tax at the reduced rate of 10% on such income..c. Any enterprise with foreign investment and foreign enterprise of a production nature, which are established in Anhui province shall be exempted from local income tax temporarily.d. The income tax on enterprises with foreign investment established in special zones or engaged in special domain shall be levied at reduced rate.VI.Tax Preference for Individual Income Taxa. For income obtained by foreign individuals from wages and salaries, a monthly deduction of income tax shall be allowed by further referring to negotiations.b.The following income obtained by foreign individuals shall be exempt from individual income tax temporarily:(1) the housing, meal, housing transfer and cloth washing allowance are exempt, provided they are not paid by cash and the amount is in proof of invoice;(2). the allowance of trip at home and abroad are exempt, provided they are paid in rational standards;(3) the home leave fare, educational expense for children, language training expense are exempt, provided both the amount of fare and the frequency each year are considered reasonable by the tax authority;(4) incomes obtained by foreign individuals from dividends and extra dividends derived from foreign-invested enterprise are exempt.c. Income from wages and salaries obtained by the following foreign experts shall be exempt from individual income tax:(1) the foreign experts sent directly to the People’s Republic of China to work by World Bank in accordance with World Bank’s specific item loan agreement;(2) the foreign experts sent directly to the People’s Republic of China to work by the UN organizations;(3) the experts who come to work for the aid program of the United Nations;(4) the experts sent to the People’s Republic of China by aid-giving countries to work for the aid program given gratis of the aid-giving countries;(5) the culture and education experts who come to the People’s Republic of China to work within two years because of the cultural exchange program signed by the governments of the People’s Republic of China and the related country, whose income from wages and salaries is borne by that country;(6) the culture and education experts who come to the People’s Republic of China to work within two years because of the international exchange program of universities and colleges of the People’s Republic of China, whose income from wages and salaries is borne by that country;(7) the experts who come to the People’s Republic of China to work through the folk scientific research protocol, whose income from wages and salaries is borne by the government of the related country.VII. Tax Preference for Property Tax and Behavioral Taxa. The house of enterprise with foreign investment, being out of usage for more than half a year foroverhauling, shall be exempt from Urban Real Estate Tax during the overhauling period and before overhauling the relevant identifications material should be submitted to taxation bureau for reference.b. With the approval from the provincial government, the lands, house properties, vehicles and vessels used by enterprises with foreign investment engaged in poultry culture (including breeding poultry culture ) , processing , refrigerating and freezing within the range of the whole province for production and business, shall be exempt from Urban Real Estate Tax and Vehicle And Vessel Usage License Plate Tax for the first half of year 2006.c. The house property acquired by foreigners, compatriots from Hong Kong, Macao and Taiwan and overseas Chinese for non-business purpose is temporarily free from Urban Real Estate Tax.d. In demand-and-supply business activities, ordering goods over the phone or on line without signing written documents Shall be exempt from Stamp Tax temporarily.e. The Resource Tax on the iron ores payable by the metallurgical mines is reduced to 60% of stipulated amount of tax. from 1st January 2006.Note:The English version Guide is just for the reference. The local taxation authority shall be responsible for the interpretation of these Regulations. In case of discrepancy, the original version in Chinese shall prevail.。