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Taxation
The income tax rate for foreign-funded manufacturers is 15%. Those registered at KETD whose business operation lasts ten years or more are exempt from income tax in the first two profit-making years and allowed a 50% from the third to the fifth profit-making years . Enterprises engaged in export pay half of the tax amount due after the stipulated reduction period provided that the exported products of the year exceed 70% of the total production, furthermore,should the tax rate is lower than 10% after the tax amount is reduced to half of it, the tax is to be levied at a 10% rate. Technologicall advanced enterprises are granted an extension of the three-year 50% taxation and subject to 10% payment thereafter should the tax rate due is lower than 10%. Foreign-funded businesses are eligible for 40% tax return if they reinvest their profit and run business in China for five years or more ; and for 100% return if they make further investment in export-oriented or high-tech businesses . Should their investment include purchasing equipment made in China , they can enjoy a favorable tax return and 40% of the purchase can be refunded by the amount of tax exceeding what they paid for the year previous to the year of purchase. 50% of the technical development costs can be deducted from the tax payable of the year.
Land Use Policy
Foreign-funded enterprises are required to pay for the use of land. There are four alternatives:
(1) Obtain the right to use the state-owned land by assignment;
(2) Obtain the right to use the state-owned land through leasing;
(3) Lease the existing land-use right owned by some enterprise;
(4) Use the land of collective ownership reserved for constructional purposes.
Talent Policy
The city adopts a very liberal policy to draw talents from home and abroad, from all walks of life . They are not only offered a great many conveniences and opportunities but shares, eligibility for low fee as well. University graduates recruited by joint ventures, college graduates in badly needed specialties and people with at least medium academic title could settle in Kunshan without paying any charge; and all kinds of talents to meet enterprise's requirement will be provided with a Green Card for Talents and are allowed to flexibly make their choice.The talents development foundation has been established: to subsidize the talents introduced for their settlement; to pay the expenses for starting scientific researchesand to reward those who make remarkable achievements in scientific researches.
Policies Implemented in the Export Processing Zone
It enjoys a preferential policy known as "inside the boundary but outside the jurisdiction of the Customs" which is to say:
1. No bank deposit system, no customs registration system , no value - added tax or consumption tax on processed products and no I / E quota and export license are to be imposed on those who are engaged in processing business in the zone.
2. Duty exemption applies to the cases as follows:
(1)Imported machines , equipment , moulds , parts and accessories (for repair only) necessary for pro-duction;
(2) Imported machines , equipment necessary for production infrastructure constructions;imported capi-tal construction materials necessary for factory buildings and warehouses;
(3) Reasonable amount of office ware if they are imported for self-use by the enterprises and administr-ative institutions;
(4) Final products , leftover pieces , defective or waste products which are processed in the zone and to be sold abroad.
3. Raw materials, spare parts , components , packing materials wear-and-tears imported forprocessing export products are bonded for the total value.
4. Goods coming from the outside are treated as being exported and eligible for tax refund. The Zone is the first one among all that carried out an experimental system on closing & transferring accounts for deep processing industries.
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