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(a) Incomes derived by research and development centres established by FIEs and foreign wholly-owned enterprises and incomes derived by foreign enterprises and foreign individuals from technology transfer, technology development and related consultancy and technical services are exempt from business Tax.

(b) The raw materials, auxiliary materials, parts, components, accessories and packaging materials imported by FIEs for the outward processing or assembly of products and for the production of goods for export are exempt from import tariffs based on the quantity of finished products actually processed and exported. Alternatively, import tariffs are levied on the imported materials and parts first and rebates are made later based on the quantity of finished products actually processed and exported.

(c) FIEs under "encouraged category" are entitled to full VAT rebate on the purchase of domestically-produced equipment within their investment amount if such equipment is listed in the catalogue of duty-free imports.

(d) Imports of equipment and supporting technologies, accessories and parts for own use by existing FIEs under the "encouraged category", foreign-invested R&D centres, FIEs with advanced technologies and export-oriented FIEs, are exempt from import tariffs and import-related taxes in accordance with the Circular of the State Council on the Adjustment of Tax Policy on Equipment Imports.

(e) Imports of equipment for own use by FIEs for producing products in the Catalogue of State New and High Technology Products and imports of supporting technology, accessories and parts as set out in the contract are exempt from import tariffs and import-related VAT, with the exception of commodities listed in the Catalogue of Non-Duty-Free Commodities to be Imported for Domestic-Funded Projects.

(f) Imports by FIEs of advanced technology in the Catalogue of State New and High Technology Products and software fees paid overseas as stipulated in the contract are exempt from import tariffs and import-related VAT.

(g) For R&D centres set up by FIEs, imports of equipment or related technologies, accessories and parts for own use that are not produced domestically or the performance of those produced domestically fails to meet the needs of the enterprises are exempt from import tariffs and import-related VAT in accordance with the Circular of the State Council on the Adjustment of Tax Policy on Equipment Imports (Circular No. 1997/37), provided that the imports are within the enterprises' total investment amount.

Major Tax Categories for FIEs and Foreigners

1.Value-Added Tax 2.Consumption Tax
3.Customs Duty 4.Business Tax
5.Enterprise Income Tax 6.Individual Income Tax
7.Land Appreciation Tax 8.Urban Real Estate Tax
9.Stamp Duty 10.Vehicle and Vessel Usage Licence Tax