Foreign-funded enterprises established in Beijing shall pay corporate income tax, value-added tax, business tax, excise, urban real estate tax, vehicle and vessel license tax, deed tax, stamp duty, land value increment tax and land use fee according to law. Meanwhile, they can enjoy respective preferential policies formulated by the state and Beijing Municipality. The main preferential policies include the following:
1. As provided in the Law of the People's Republic of China on Income Tax of Enterprises with Foreign Investment and Foreign Enterprises, “in case productive enterprises with foreign investment have an operating period of more than 10 years, the corporate income tax shall be, commencing from the year in which they start to profit, exempted from in the first and second year, and levied with a 50 per cent reduction from the third to the fifth year”.
2. As provided in Article 80 and Article 81 of the Enforcement Regulations for the Law of the People's Republic of China on Income Tax of Enterprises with Foreign Investment and Foreign Enterprises, in the event a foreign investor of an enterprise with foreign investment uses its profits earned from the enterprise directly to invest in the enterprise for increasing the registered capital, or uses its profits as capital to invest and establish other enterprises with foreign investment with an operating period not less than 5 years, upon the investor’s application and subject to approval by the tax authorities, 40% of the income tax amount already charged on the reinvestment portion can be refunded. In case offshore investors reinvest the directly earned profits in enterprises with advanced technology and export orientation having a period not less than 5 years, the charged income tax on the reinvestment can be refunded in full.
3. As provided in the Notice of Beijing Municipality on Several Regulations for Further Promoting the Development of High- and New-Technology Industries, in case of recognized projects for transfer of high- and new-technological achievements into productive forces, within 3 years after the date of recognition, from the portion of the revenues going to local authorities by way of business tax, corporate income tax and value-added tax payment, the Finances shall arrange special fund support; such support shall continue with a 50 per cent reduction from the third to the fifth year. In case of recognized projects for transfer of major high- and new-technological achievements into productive forces, within 5 years after the date of recognition, from the portion of the revenues going to local authorities by way of business tax, corporate income tax and value-added tax payment, the Finances shall arrange special fund support; such support shall continue with a 50 per cent reduction from the sixth to the eighth year. 80% of the above special fund from financial arrangement will be used in technological innovation of the respective enterprises, and 20% will be incorporated into the technological innovation fund for centralized utilization.
4. As provided in Preferential Policies Provided by Beijing Economic and Technological Development Zone for Investors, in the case of productive enterprises with foreign investment, the corporate income tax shall be charged at the reduced rate of 15%. For productive enterprises having an operating period of more than 10 years, the corporate income tax shall be, commencing from the year in which they start to profit, exempted from in the first and second year, and levied with a 50 per cent reduction from the third to the fifth year. In case they continue to be technologically advanced enterprises after expiry of the exemption and reduction period, the corporate income tax can be charged at the reduced rate of 10% for an extension of 3 years. In the case of export-oriented enterprises, after expiry of the corporate income tax exemption and reduction period as stipulated in tax laws, if the output value of export products in the current year has reached above 70% of the product output value of the enterprise in the same year, the corporate income tax shall be charged at the reduced rate of 10%.
5. As provided in Article 6 of Several Regulations of Beijing Municipality for Encouraging Foreign Investment in High- and New-Technology Industries, for productive enterprises having an operating period of more than 10 years, the corporate income tax shall be, commencing from the year in which they start to profit, exempted from in the first and second year, and levied with a 50 per cent reduction from the third to the fifth year. The corporate income tax charged at the reduced rate of 50 per cent, upon application of the enterprise and subject to approval by the financial department at the same level, shall be refunded in full. In case the enterprise continues to be technologically advanced enterprise after expiry of the exemption and reduction period, the corporate income tax can be charged at the reduced rate of 10% for an extension of 3 years. In case the tax rate of 50% reduction is less than 10%, the tax shall be levied according to 10% rate. High- and new-technology enterprises with foreign investment shall be exempted from the local income tax.
6. As provided in Article 4 of Several Regulations of Beijing People’s Government for Encouraging Multinational Corporations to Establish Regional Head Office in Beijing, in the event the head office of a transnational corporation uses the profit after corporate income tax payment to Beijing for capital reinvestment in Beijing, the Municipal Finances may grant refund according to a certain proportion of the corporate income tax actually paid to the local authorities based on the reinvestment tax refund stipulated in the tax law. The regional head offices of transnational corporations shall be exempted from local income tax.
7. As specified in the Directive Index for Foreign Invested Industries, for foreign invested projects falling within the Encouraged Category, the imported equipment for self use within the total amount of investment, with exception of those listed in the “Catalogue of Imported Commodities Not to Be Exempted from Taxes in Foreign Invested Projects (2000 Revision)”, shall be exempted from custom duties and value-added tax from import.
The development and investment environment in Beijing is improving. After more than two decades of reform and opening up, Beijing has been improving the investment promotion system and management service system in line with international practice, and making proactive efforts to open up wider to the outside world to build Beijing into a most open city. Beijing, particularly with the already shaped auto industry cluster in the east region, has provided favorable conditions for the development of automobile and parts and components industries.
WELCOME TO INVEST IN THE AUTO INDUSTRY IN BEIJING.