Policy on the Enterprise Income Tax
1. Foreign enterprises can enjoy preferential tax treatment: "2 items released, 3 items halved" from the year the enterprise starts making profit. ‘2 items released’ means that newly-established enterprises can enjoy an income tax exempt within 2 years starting from normal operation; ‘3 items halved’ means that in the next three years, the income tax will only be half of the normal 33 percent.
2. As to the outstanding software enterprises within the layout of State planning, if the captioned preferential policy in Article 1 is not ideal, the income tax rate shall be at 10 percent (normally 33 percent).
3. As to the newly established enterprises, they can get a tax refund for the income tax levied in the first two years from the same-level fiscal department, and withhalf of the income tax refunds in the next three years. After the preferential period, if export value reached 70 percent of the total production value, income tax rate will be decreased to 10 percent (normally 33 percent)
4. If the enterprise belongs to newly established software enterprises and/or hi-tech enterprises, within the hi-tech development zones certified by the State Council, enterprises can enjoy additional preferential tax treatment. In the preferential period, the rate of the income tax can be halved based on the 15 percent. After the expiration of the tax preferential period, the rate of the income tax will be 15 percent.
5. Productive foreign-invested enterprises can enjoy a total exemption of local income tax in the first one to two years from benefiting years and half an exemption in the following3-5 years from benefiting profits.
Policies on the value-added Tax1. After value-added tax of Software products produced by enterprises is levied at the rate of 17 percent, according to the tax law, the extra three percent will be given back to the enterprise.
2. The nil value-added tax rates will be used for exported software products produced by enterprises and export tax will be exempted. For technology export contract the sales tax and income tax will be exempted.
3. If the export value of software products produced by the enterprise exceeds $1 million, the enterprise can enjoy self-support software export right.
Policy on Tariff
1. For imported equipment used by the software enterprise itself, the technology (including software, the parts and spare parts imported together with the equipment, the import tax and import value-added tax will be exempted (commodities described in the category of foreign investment projects and non-tax-free imported commodities are not included) .
2. The import of apparatus and equipment to be used by the high technology enterprises for the development of their high technology and which cannot be made at home shall be exempted from import duties,according tothe approval papers issued by the authorities and the verification from the Customs.
Policy on Business Tax
1 Except the sale revenue of software enterprise from which value-added tax should be levied; the income from technology transfer with appropriate conditions and procedures, technology development business, consulting business related with technology development, technology service business shall be exempted from business tax; urban maintenance and construction tax, Surtax for Education and (local) education supplementary tax.
2 For the private scientific and technical enterprise, income from technology transfer shall be exempted from business tax, according to the approval papers issued by local tax bureaus.
3. As to entity or individual (including foreign-funded enterprises, foreign-funded research center, foreign enterprises and foreigners), the income from technology transfer, technology development business, consulting business related with technology development, technology service business shall be exempt from business tax.
Policy on Personal Income tax
1. Income from the hi-tech and software projects in the hi-tech and software enterprises as well as the shares distributed and issued to individuals, shall be reutilized in the production and management system and be exempted from the personal income tax.
2. The salaries of returned overseas students who are engaged in accredited transformation projects with new and high-tech achievements may enjoy the additional deduction of the cost, according to the stipulations concerning personal income tax.
3. The salaries of technicians is based on the directions of the enterprises, which are engaged in the technique development, technique transfer, consulting business as well as the relevant technique transfer and technique service. The personal income tax shall be levied according to the remuneration for providing services.
Policy of Attracting Talents
1 Long-term effective "temporary residential card" will be issued to overseas Chinese who work with their spouses and underage children; the city environmental fee will be exempted from them. If their children enter school or kindergarten, they can enjoy the same treatment as the normal residents in Wuxi, and they can also enjoy related treatment described in "Regulations for encouraging overseas Chinese to work in Wuxi".
2. Special funds established by related departments of the state, the province and the city will be provided for enterprises every year. Enterprises can also get support from VC firms.
3 Enterprises can enjoy preferential treatment in buying or renting office buildings. Employees of the enterprises can get preferential treatment in buying excellent residential buildings.
