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In order to seize the historic opportunity brought in by the West China Development strategy,and to attract domestic and international capital,technology and talents to Chongqing,as well as to speed up Chongqing's social and economic development in a purpose to build Chongqing into an economic center in upper reaches of Yangtze River as early as possible,a number of incentives are hereby released according to the documented ideas of the State Council while taking into account the actual conditions of Chongqing to be detailed as follows.
Chapter 1 Taxation and Finance
Article 1
For all domestic enterprises of different ownership and foreign-invested enterprise established in Chongqing,which cover the state encouraged industries,the Corporate Income Tax shall be levied at 15% from 2001 to 2010.
Article 2
From 2001,the Corporate Income Tax of newly established domestic enterprises in chongqing covering areas of traffic,communication,electric power,water conservancy,post service and brodcasting shall be exempted for the first 2 years starting from the profitable year,followed by a levy at half of the rate for another 3 years.Among them those who have a rather low profit margin but have made significant social contributions may be given a further 5 years¡¯levy at half of the rate,subject to the approval of local taxation authorities or the state taxation authorities if required.Same shall apply to the foreign-invested enterprises who comply with the Item 1 of Article 8 of the Chinese Law on theCorporate Income Tax of Foreign-Invested Enterprises and Foreign Enterprises.
Aricle 3
The corporate Income Tax of domestic enterprises and foreign-invested enterprises established in the 5 minority areas including Qianjiang District, Shizhu County, Xiushan County, Youyang County and Pengshui County may be Levied or exempted flexibly on a regular basis from 2001 to 2010 subject to the approval of Chongqing Municipal Government. Industries or enterprises which are banned, restricted or to be closed down by the state are excluded.
In the event of local enterprises who are not located in the minority areas making an investment in the above 5 places in manners of setting up a new plant,shares contribution, take-over and technical transfer, the Profit After Tax obtained from the investment shall be free of Corporate Income Tax from 2001 to 2010.
Article 4
The Agricultural Specialty Tax on income out of ecologic environmental protection and forestation of cultivated sloping-land shall be exempted from 2001 to 2010. For the road construction approved by Municipal Planning Department according to government programming, Tax on Occupation of Cultivated Land shall be exempted.
Article 5
In the event of domestic and foreign-invested enterprises (inclusive of natural person) investing in the projects covering the state encouraged industries; in the event of foreign-invested enterprises investing in the projects covering Grade 2 Restrictive Industries as defined in A Guided Catalogue of Sectors for Foreign Investment, inport duty and import linkage VAT on equipment imported within their total investment for their own use shall be exempted,except for those which are declared to be not duty free by the state.
For imported equipment by domestic enterprises operating inhabitant resettlement project for their own use in the Three-Gorges area before 2003, a policy of return of full amount of import duty and import linkage VAT shall apply with the exception of the imports which are declared to be not favored by the state.
Article 6
The municipal key projects and the projects which comply with the state industrial policy or should be supported according to the states regulation shall enjoy priorities in utilization of government financing, foreing government financing, international funds, foreign commercial loan, insurance of local bond,bank loan and discount.Local administrative fees on programming,fire fighting and construction assessment of municipal key projects shall be reduced or exempted(flat cost excluded)while fees under government guidance shall be charged at a minimum level.
Article 7
The cost of an enterprise on development of new product,new technology and new process can be listed according to actual expenditure.In the event of such cost growing by 10% or above,50% of actual expenditure can be used again to offset due amount subjected to taxation,expenditure of an enterprise on purchase of special of important testing equipment and instruments required to support R D can be apportioned to cost for once or several times,subject to the verification of financial and taxation departments concerned.
Article 8
During the 10th National 5-year Plan period,municipal government shall continue to provide high new technology investment financing and risk grarantee of certain amount in forms of subsidy to share contribution,loan discount and financing guarantee to support projects pertaining to development and industrialization of high new technologies.
Article 9
For enterprises located within the New Northern Zone of Chongqing, Chongqing Economic Technological Development Zone,Chongqing Higy New Technology Industrial Zone,Chongqing University Science technology Park and Chongqing Modern Agricultural Develpment Zone,the Corporate Income Tax shall be reduced to 10% in case that and annual production value of high new techonlogy-oriented product plus technical earnings or annual export value reaches over 60% of the total annual output,subject to the approval of taxation authorities in charge.
Aritcle 10
The Risk Compensation of high new technology enteprises retgistered within the New Northern Zone whose investment in high new technology makes up over 60% of total project investment can be drawn before tax at 3-5% against an annual profit for 3 years starting from the profitable year.
Article 11
For a recognized project with commercialization of high and technical achievement within the New Northern Zone,the full amount of accreted part of Business Tax and the accreted part of VAT (Accreted part of a newly estabilshed enterprise is to be calculated according to the average enterprise is to be calculated according to the average accreted rate of the area) retained by local government paid within 2 years can be arranged by the New Northern Zone Administration in manners of capital contributions starting from 2001,to be followed by another 3 years during which such arrangement shall be made for half of the amount in support of an enterprise's further development.
Article 12
A Special Industrial Fund shall be set up within the New Northern Zone,which shall be used by ways of share contribution,norm subsidy,discount of bond and loan to support high and new technology-oriented industries with in the New Northern Zone,including software,photoelectronics,bio-pharmaceutical new medicine,agricultural,forestry and husbandry application,as well as export-oriented processing.
Article 13
In the event of the investment of fixed assets of an enterprise established in the New Northern Zone reaching RMB 50 million Yuan or its registered capital reaching RMB 100 million Yuan,or its annual sales volume reaching RMB 500 Million Yuan,full value of its paid amount of income tax which actually arrived on the account of the New Northern Zone can be arranged by the Financial Authority of the New Northern Zone Adminsistration as a special fund within 2 years starting from the profitable year,to be followed by another 3 years during which such arrangement shall be made for half of its paid amount in support of the tax-paying enterprise's production operation,subject to the approval of the New Northern Zone Administration.
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