Corporate Income Tax Cut for Foreign Companies Investing in Western China
In an effort to encourage further foreign investment into its western regions, China is reducing the standard enterprise income tax rate of 25% to 15% for foreign companies willing to locate there. The tax relief policy will last three years.
The Ministry of Finance, the State Tax Administration and National Development and Reform Commission have jointly issued a circular regarding the preferential tax policy, which will apply in the provinces of Sichuan, Guizhou, Yunnan, Shaanxi, Gansu, Qinghai, Chongqing, as well as the autonomous regions of Inner Mongolia, Guangxi, Tibet, Ningxia Hui and Xinjiang.
The reduced rate will be effective from beginning of January 2021 to the end of December 2023.