Major preferential Treatments for overseas-funded ventures 

A. Income Tax
    Enterprise income tax
    Basic rate: 30%
    Subject: Taxable profit
    General Preferential treatment
    1). Tax-exemption & half-tax-rate collection (the following b-e should be applied and approved in advance. 
    a. Manufacturing enterprises, with ten years or more operation terms, can enjoy two years of tax-exemption from the first profit-making year, and half-tax-rate treatment for the following three years (so-called F2F3, first two & following three preferential treatment) 
    b. Export-oriented enterprises whose yearly export value accounts for 70% of the annual gross products can enjoy half-tax-rate treatment continuously upon expiry of the above-mentioned F2F3 preferential treatment. (Enterprises who pay 15% tax rate but meet these requirements can have 5% tax rate off. )
    c. Advanced-technology enterprises, which are still evaluated as advanced-technology ones after expiry of F2F3 preferential treatment, can enjoy another years of half-tax-rate preferential treatment.
    d. Enterprises which meet requirements in the above b and c should choose one preferential treatment. 
    e. Sino-foreign joint ventures which engage in port & wharf construction can enjoy five years of tax-exemption from the first profit-making year, and half-tax-rate treatment for the following five years. 
    2). Tax-Rate reduction preferential treatment (the following b should be applied and approved in advance.) 
    Manufacturing enterprises can be charged at a reduced tax of 24%.
    The following enterprises can be charged at a reduced tax of 15%:
    Technology-intensive & knowledge-intensive projects;
    Projects with 30 million USD foreign investments or more, with long period of yield. 
    Projects of energy & power, traffic communication, port & terminals construction. 
    Local income tax
    1. Basic tax rate: 35.
    2. Subject: taxable incomes. 
    3. General Preferential Treatments
    1). On the basis of the above-mentioned F2F3 preferential treatment for income tax, enterprises can enjoy free local income tax. 
    2). In special cases, enterprise can apply to tax authority for tax reduction or exemption, and they can be offered reasonable preferential treatment in tax. 

B. Business sales unified tax 
    1. Tax rate: different tax rate. 
    2. Subject: taxable product sales and turnover of business.
    3. Rules for tax exemption & collection 
    Materials which are imported for producing exported products and articles which are purchased by the investment capital are free of tax. 
    Products sold to domestic market should be charged according to tax rules. 
    Enterprises which are charged different VAT rate or which have difficulty to pay tax at initial period can enjoy tax preferential treatment or tax exemption after the related application is approved. 

C. Real Estate Tax 
    1. General Tax rule: this tax is collected annually. The self-owned building assets are taxed according to the rate 1.2% on the basis of 70% of the total original value. For the rent received from house lease, the tax rate is 18%. 
    2. General preferential treatment: Self-built real estate property are exempted real estate property tax for three years since the date of completion or purchase (5 years for enterprises invested by overseas Chinese.) 

D. Vehicle & Ship Tax 
    This tax is collected according to Temporary Regulation for Vehicles & Ships 

E. Import Customs Tax 
    1. The imported materials, which are exempted from Business sales unified tax, enjoy free import customs tax. 
    2. Cars which are imported by enterprises for exclusive self-purpose should conform to the standards related to the amount of registered capital. The cars are free from Import Custom tax if they are in conformity with the standards.