Two exemptions and three halving means that foreign-invested enterprises can enjoy the treatment of two-year exemption and three-year halving of enterprise income tax from the profit-making year. Foreign-invested enterprises encouraged by the state in the central and western regions can be extended for three years after the expiration of the five-year tax reduction or exemption period, and the income tax will be halved.

Advanced technology enterprises established with foreign investment can enjoy three-year tax exemption and six-year reduction of enterprise income tax; For export-oriented enterprises, in addition to the above-mentioned two exemptions and three reductions in income tax, as long as the annual export volume of the enterprise accounts for more than 70% of the total sales of the enterprise, it can enjoy the preferential treatment of halving the enterprise income tax; Foreign-invested enterprises that purchase domestic equipment within the total investment, which falls within the scope of the Import Duty Free Catalogue, can be deducted from enterprise income tax according to regulations.

I. The functions of the two exemptions and three reductions policies are as follows:

1 is to encourage foreign investment to transform traditional agriculture, develop modern agriculture and promote agricultural industrialization;

2. It is to encourage foreign investors to invest in infrastructure and basic industries such as transportation, energy and raw materials;

3. Encourage foreign investors to invest in electronic information, bioengineering, new materials, aerospace and other high-tech industries, and encourage foreign investors to set up R&D centers in China;

4. It is to encourage foreign businessmen to use advanced and applicable technologies to transform traditional industries such as machinery, light industry and textiles, and to upgrade the equipment industry;

5. First, encourage foreign investment in comprehensive utilization of resources and renewable resources, environmental protection projects and municipal projects;

6. Encourage foreign investors to invest in western advantageous industries in line with the strategy of developing the western region;

7. This is a permitted project, and all foreign-invested products are encouraged to export.

Second, the scope of encouragement.

China mainly encourages foreign investment in the following fields:

First, encourage foreign investment to transform traditional agriculture, develop modern agriculture and promote agricultural industrialization.

The second is to encourage foreign investors to invest in infrastructure and basic industries such as transportation, energy and raw materials.

Third, encourage foreign investors to invest in high-tech industries such as electronic information, bioengineering, new materials, aerospace and so on, and encourage foreign investors to set up R&D centers in China.

Fourth, foreign businessmen are encouraged to use advanced and applicable technologies to transform traditional industries such as machinery, light industry and textiles, and upgrade the equipment industry.

Fifth, encourage foreign investment in comprehensive utilization and regeneration of resources, environmental protection projects and municipal projects.

Sixth, in line with the strategy of developing the western region, encourage foreign investors to invest in advantageous industries in the western region.

Seventh, licensing projects to encourage foreign-invested products to export.

Three, foreign-related enterprises to apply for "two exemptions and three reductions" of the specific procedures and attached materials.

According to Article 8 of the Income Tax Law of People's Republic of China (PRC) on Enterprises with Foreign Investment and Foreign Enterprises, if a productive foreign-invested enterprise has been operating for more than 10 years, the enterprise income tax will be exempted in the first and second years from the profit-making year, and the enterprise income tax will be halved in the third to fifth years.

If you meet the requirements, you can write an application stating the company's business scope, source of registered funds, operating conditions, profit time, etc. Write them clearly and send them to the competent tax authorities. This application can be sent when the enterprise starts production and operation, or in the profit-making year, but it is best to send it when the enterprise starts production and operation.

The following is the specific content of the application:

(1) enterprise name and registered capital;

(2) Industry, production and business scope, main product names or main business items;

(3) Actual operation time and determined operation period;

(4) Apply for confirmation of the qualification for regular tax reduction or exemption according to the provisions of Article 8 of the Income Tax Law for Enterprises with Foreign Investment and Foreign Enterprises.

When you write an application, you should submit the following materials:

(1) Feasibility report of the approved enterprise;

(2) Capital verification report and its photocopy;

(3) Other materials and certificates required by the competent tax authorities.

Enterprises should be responsible for the authenticity of the above information and bear corresponding legal responsibilities. If the information provided is a copy, it should be clearly stated that it is consistent with the original kept by the enterprise and stamped with the official seal of the enterprise for confirmation. Enterprises that meet the conditions of regular tax reduction and exemption, but have not applied for the above tax reduction and exemption, cannot enjoy the corresponding tax reduction and exemption.

legal ground

People's Republic of China (PRC) enterprise income tax law

Article 3 A resident enterprise shall pay enterprise income tax on its income from sources inside and outside China.

Where a non-resident enterprise establishes an institution or place in China, it shall pay enterprise income tax on the income obtained by its institution or place from China and the income generated outside China but actually related to its institution or place.

If a non-resident enterprise has no institution or place in China, or if it has an institution or place, but its income has no actual connection with its institution or place, it shall pay enterprise income tax on its income originating in China.