State Administration of Taxation, Issues Relevant to Enjoyment by Foreign-invested Enterprises of Preferential Enterprise Income Tax Policies on Additional Investments Supplementary Circular

Issued: March 28 2003

Main contents: The Circular clarifies that foreign-invested projects whose additional investments are approved before April 1 2002 shall belong to the encouraged category or type B of the restricted category of the Foreign Investment Industrial Guidance Catalogue promulgated in 1997 while those projects whose additional investments are approved on or after April 1 2002 shall belong to the encouraged category of the Foreign Investment Industrial Guidance Catalogue promulgated in 2002 (Item One). The Circular also clarifies that additional investments that have created production or business projects and that have not enjoyed regular tax reduction or exemption preferential treatment may be put together for the calculation of registered capital increase and enjoy tax reduction or exemption thereon (Item Two). The preferential period should start from the profit year of the production or business project created by the first additional investment (Item Four).
Related legislation: Enjoyment by Foreign-invested Enterprises of Preferential Enterprise Income Tax Policies on Additional Investments Circular, Jun 1 2002, CLP 2002 No.6 p14; Tax Collection Questions Relevant to the Implementation of the New «Foreign Investment Industrial Guidance Catalogue»Circular, May 30 2002, CLP 2002 No.7 p15 and Foreign Investment Industrial Guidance Catalogue (Amended in 2007), Oct 31 2007, CLP 2007 No.10 p22