1, to promote the innovation and development of enterprises. Preferential tax policies can promote enterprise R&D innovation and promote economic transformation and upgrading by reducing R&D expenses and investment in technological transformation.

2. Encourage enterprises to expand production and employment. Preferential tax policies can reduce the cost of enterprises, encourage enterprises to expand production scale and increase jobs by reducing or exempting corporate income tax, business tax and other taxes as well as VAT refund.

3. Attracting foreign investment and supporting specific industries. Tax preferential policies can attract foreign investment, promote economic development and improve the competitiveness of specific industries by giving tax preferential treatment to specific industries or regions;

4. Promote the optimal allocation of resources. Tax incentive policy can promote the optimal allocation of resources and sustainable development by giving preferential treatment to enterprises that consume less resources such as environmental protection and energy.

The forms of tax incentives are as follows:

1. tax reduction: tax reduction is a measure to reduce part of the tax payable calculated by taxpayers according to the tax rate stipulated in the tax law. The state stipulates tax reduction in tax laws and regulations in order to encourage and support some taxpayers. Tax reduction shall be implemented in accordance with the provisions of the tax law. There are two specific ways to reduce taxes. One is the method of decreasing proportion, that is, decreasing a certain proportion according to the calculated tax payable. For example, China's tax law stipulates that foreign-invested enterprises engaged in service industries established in special economic zones with an investment of more than US$ 5 million and an operating period of more than 10 years may be exempted from enterprise income tax in the first year and levied at a half rate in the second to third years. The second is the tax reduction law, that is, reducing the tax rate to reflect tax reduction. For example, according to China's tax law, foreign enterprises that set up institutions and places in special economic zones to engage in business can collect enterprise income tax at a reduced rate of 15%;

2. Tax exemption: Tax exemption is a measure to encourage some taxpayers or certain behaviors by not collecting the tax payable by taxpayers according to the provisions of the tax law. For example, China's tax law stipulates that agricultural production units and individuals selling their own primary agricultural products can be exempted from value-added tax. Tax exemption is different from tax exemption amount. The so-called exemption amount refers to the tax-free amount deducted from taxable objects. When the taxable object is less than the exemption amount, no tax is levied; When the exemption amount is exceeded, only a part of it will be taxed. Exemption is not a tax preference, it is the same for everyone and does not form a preference for anyone. This is an integral part of the tax system. Tax exemption is also different from the threshold, which is the quantitative boundary of tax revenue. If the tax object does not reach the threshold, no tax will be levied. Those who reach and exceed the threshold will be taxed in full. For example, China's current business tax regulations stipulate that the starting point for paying taxes on time is the business from 200 yuan to 800 yuan every month; According to the second levy, the threshold is the daily turnover of 50 yuan. All localities can determine the starting point of the region according to local conditions. No tax is levied if it does not exceed the threshold, and it is levied in full if it exceeds the threshold, and the threshold is not deducted from the full amount. The threshold seems to be a kind of tax preference, but it is actually to take care of taxpayers with less taxable income, and its purpose is to make the tax policy conform to the principle of reasonable burden, and the threshold is also an integral part of the tax system;

3. Export tax rebate: Export tax rebate refers to the measures taken by the tax authorities to refund the turnover tax originally borne by the export enterprises according to the provisions of the tax law. Its purpose is to encourage exports. Taxpayers who export goods for which the applicable tax rate is zero may apply to the tax authorities for tax refund on a monthly basis with the export declaration form and other documents after going through the export formalities with the customs;

4. Advance collection and advance refund: advance collection and advance refund is a measure to collect the tax payable by taxpayers according to the provisions of the tax law, and then the financial department will return it in full or in part. For example, after the tax system reform of 1994, the turnover tax of foreign-invested enterprises exceeding the tax burden will be refunded, that is, the tax will be levied according to the unified turnover tax regulations first, and then the tax burden under the new turnover tax system will exceed the tax burden under the original turnover tax system.

To sum up, the role of preferential tax policies is not only to reduce the burden on enterprises and promote economic development, but also to promote the optimal allocation of resources and support scientific and technological innovation and industrial transformation and upgrading.

Legal basis:

Article 10 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC).

The term "loss" as mentioned in Article 5 of the Enterprise Income Tax Law refers to the total income of an enterprise in each tax year, and the balance after deducting non-taxable income, tax-free income and various deductions in accordance with the provisions of the Enterprise Income Tax Law and these Regulations.