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Preferential policies of industrial zones

Updated: 2014-06-29

The two state level industrial zones, CETZ and CHTIDZ, provide preferential taxation and financing policies for enterprises

·Both industrial zones fully implement all favourable policies of national economic and development zones and national hi-tech industrial development zones

—the Corporate Income Tax rate for advanced and new technology enterprises recognized by the relevant government authority (i.e. Advanced and New Technology Enterprise Recognition Institution composed of the government authorities of science and technology, finance and tax) is reduced to 15 percent 

·In CHTIDZ

—the finance department of the Zone committee has set up a special fund (USD 28.2 million) for industry development to support the development of key industries, featured industries, and technological innovation projects

—manufacturing enterprises in the electronics, equipment and advanced material industries with one-time fixed asset investment of USD 70.4 million or more, can assess a separate industry support fund. The amount of funding will be 10 percent or more of the fixed asset investment, considering the contribution of the projects to taxation in CHTIDZ

—headquarters and regional headquarters that do not set up a manufacturing base, can receive a cash grant within three years of starting operations. The amount will be 10 percent to 40 percent of the tax collected by the CHTIDZ from the enterprises

—“Fortune 500” or Chinese top 100 enterprises who conduct research or production in industries such as IT / communication, equipment manufacturing and advanced materials, or set up headquarters or regional headquarters in CHTIDZ, will be given a one-off industry support grant. The amount of the grant will be USD 70,500 to 141,000 considering brand reputation, investment scale and production volume

—50% of the actually collected tax by the district government from the individual income tax paid by the senior executives in the enterprises and enterprise headquarters and regional headquarters mentioned in Article 3,4,5 will be rewarded to the tax payer within 3 years since the date of paying tax. In case they buy apartment for the first time at Lugu, a reward equaling 50% of the tax actually collected by high-tech zone government from the personal income tax paid in the 3 years before the purchase will be given to the apartment buyer. The reward shouldn’t exceed 80% of the price of apartment.

—to small and medium-sized enterprises of science and technology, according to the amount of new taxation on enterprises, the finance department of CHTIDZ will provide a loan interest payment support of no more than 40 percent of the loan interest from the bank. However, the total discount rate gained by one enterprise from all levels of government cannot exceed the loan rate

—the zone will wave administration fees for enterprises that do not pay any levies other than tax

—Changsha Customs offers efficient customs clearance measures in accordance with relevant regulations and policies such as pre-arrival declaration and on-the-spot examination to those enterprises within the Zone

 ·In CETZ

—the Zone management committee will allocate CNY 200 million every fiscal year to develop key leading industries and spur technological innovation in the Zone

—automotive and construction machinery enterprises enjoy a deduction from the current year’s taxable income equal to 150% of R&D expenses for new products, technology and manufacturing techniques

—new projects (or those with upgraded technology), with an fixed asset investment of over CNY 2 million per mu(a) or an output of over CNY 3 million per mu, enjoy a 20% refund of the local tax paid for a five year period from the year that operations commence 

Sources: (1) Administrative Committee of CHTIDZ

(2) Administrative Committee of CETZ

Note: (a) 1 mu=0.16 acre