Preferential Policies on Encouragement of Foreign Investment of the People'sGovernment of Inner Mongolia Autonomous Region
Date of Issue: January 1, 1999
Area Applied: InnerMongolia Autonomous Region
Article 1. These regulations are formulated for the purpose of further introducing foreign investment and promoting the development of our regional outward-oriented economy.
Article 2. These regulations shall apply to foreign corporations, enterprises and other economic entities or individuals; Sino-foreign joint ventures, cooperative ventures and wholly foreign-funded enterprises (hereinafter called foreign investment enterprises) and other public utility organizations set up in Inner Mongolia.
Article 3.The foreign investment enterprises engaged inproduction and with a term of operation of over 10 years shall be exempted from corporate income tax for the 1st and 2nd year from the profit-making year, shall pay corporate income tax at half of the stipulated ratefrom the 3rd to the 5th year, and pay income tax at the rate stipulated by the State from the 6th year to the expiration of the term of operation with the part above 24% to be returned by the local financial departments.
Article 4. We shall encourage the establishment of foreign investment enterprises withlarge investment.
(1)For those enterprises within the scope of encouragement covered by the State's industrial policies, with foreign investment of over US$3 million and with a term of operation of over 10 years, they shall enjoy the same tax treatment as those in operation in the open cities with the approval from the financial and taxation authorities.
(2)The foreign investment enterprises engaged inservice sectors with foreign investment of over US$5 million and with a term of operation of over 10yearsshall pay corporate income tax at the stipulated rate from the profit-making year, 50%of which shall be returned by the local financial departments.
Article 5. The technically advanced enterprises and export-oriented enterprises in Development Zones shall pay corporate income tax at the stipulated rate of the State, the part above 15%of which shall be returned by the local financial departments.
Article 6. For those foreign investment enterprises who have reinvested their profits (including the income tax return through exemption orreduction) in the productionof exports or expansion of export supplies, they shall be exempted from corporate income tax afterthe approval of their application by the financial and taxation departments. Should their productsbe supplied for exports, they'll pay VAT at the rate of zero. If theirproducts are taxable consumer goods, they shall be exempted from consumption tax.Afterthe expiration of the term of operation or reduction of income tax on the export products ofthose foreign investment enterprises, they shall pay corporate income tax at half of the stipulatedrate if their annual turnover in exports exceeds 70% of the same year.
Article 7. After the expiration of the termof operation or reduction of income tax within the term of operation, the enterprises engagedin the development of agriculture, animal husbandry and forestry shall enjoy a30%reduction in corporate income tax for the subsequent 10 years with the approval of the financial and taxation departments.
Article 8. The foreign investment enterprises shall beexempted fromlocal income tax.
Article 9. The foreign investment enterprises not engaged in transportation business shall be exempted from license tax for the use of vehicles duringthe approved term of operation.
Article 10. If foreignbusiness people invest in such infrastructure projects asenergy, communications, coal industry, power supply, railway and highway,they shall enjoy the following preferential policies:
(1)The investors shall be allowed to performconstruction and operation by way of Build-Operate-Turnover (BOT).
(2)For highway projects, theinvestorscan, with approval, expand the development oflandand conduct service business within a certain area alongside the highway.
(3) The enterprises shall,according to their business requirements, fix the price and the feestandard with the approvalof theAutonomous Region's finance and price authorities.