Yiwu investment Policy---Preferential Policy on Purchasing Domestic Equipment

Yiwu Company Tax Service
Hotline: 86-755-82143422 Email: anitayao@citilinkia.com

The foreign investment enterprises which are set up in Yiwu can enjoy 40% offset from their increased amount of corporate income tax of current year on that of the previous year, if they purchase, within gross investment, domestic equipment except for those listed in “Catalog of Imported Products of Foreign Investment Projects Not Exempted from Duties” stipulated in document Guo Fa (1997) No. 37, for nationally encouraged and limited category B projects comply with “Instruction Catalog for Foreign Investment Industry” stipulated in “The State Council Announcement about Adjusting Imported Equipment Tax Policy” (Guo Fa (1997) No.37).

Also, enterprises above may enjoy 40% offset from their increased amount of corporate income tax of current year on that of the previous year, if they purchase, out of gross investment, domestic equipment for products updates, export expansion, improving economic efficiency, product quality and series, and for reducing cost and energy, reinforcing integrated utility of resources, recovery of “three wastes” and work safety, to transform original facilities and technical conditions with advanced and suitable new technology, crafts, equipment and materials.

Foreign investment enterprises can have full amount of VAT refund if they purchase, within gross investment, domestically produced equipment which belongs to exemption products category.

The scope of equipment enjoying tax refund: the equipment purchased domestically for investment projects that comply with “Instruction Catalog for Foreign Investment Industry” (nationally encouraged category and limited category B) stipulated in “The State Council Announcement about Adjusting Imported Equipment Tax Policy” (Guo Fa (1997) No.37), and “Nationally Encouraged Key Industries, Products and Technologies Category of today”.

For projects stipulated above, purchased with equipment, part of plastic, rubber and ceramic components and the pipelines used in petrochemical projects, if listed in the purchasing contract, can also enjoy tax refund.

The domestically purchased equipment which is listed in “Catalog of Imported Products of Foreign Investment Projects Not Exempted from Duties” and “Catalog of Imported Products of Domestic Investment Projects Not Exempted from Duties” is not covered by the preferential policy of tax refund.

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