Advantage Four: Preferential Policies

WEDA was established with the approval of the state council in April 1993. The standing committee of Anhui provincial Congress promulgated the "Regulations on Wuhu Economic and Technological Development Area". Wuhu municipal government entrusted the Administrative Committee of WEDA as representative to manage the area. The Administrative committee exercises authority in the capacity of Wuhu municipal government and even the provincial government in certain areas. The Administrative committee of WEDA exercises the following preferential policies.

Item 1. A foreign-funded enterprise shall pay enterprise income tax according to The Income Tax Law of the People's Republic of China Concerning Foreign-funded Enterprises and Foreign Enterprises. A production-oriented foreign-funded enterprise pays enterprise income tax at an after-reduction rate of 15%.
A production-oriented foreign-funded enterprise of which the operational period is over 10 years is granted an exemption from income tax for the first and second year and a reduction in income tax by half from the third to fifth year, i.e. a tax rate of 7.5%, commencing in the year in which the enterprise begins to make profits.

Item 2. In case the enterprise is advanced-technology-oriented, it is granted a reduction in income tax by half for 3 more years as long as, according to state regulations, it remains advanced-technology-oriented after the exemption-reduction period is over. In case the enterprise is export-oriented, it pays income tax at the rate of 10% after reduction as long as, according to state regulations, its export value of the year equals or exceeds 70% of its output value of the same year after the exemption-reduction period is over.

Item 3. An investor from a foreign-funded enterprise may, with an application of the investors and approval of the taxation authorities, obtain a 40% refund of the income tax he paid on the part of the profits to be used as reinvestment as long as he reinvests that part of the profits, which he gained from his enterprise, in the same enterprise or in the establishment of a new enterprise in the Zone, whose operation covers a period of not less than 5 years', he may obtain a full refund of the income tax he paid on the part of the profits to be used as reinvestment as long as he reinvests that part of the profits in an export-oriented enterprise or an advanced-technology-oriented enterprise, whose operation covers a period of not less than 5 years.

Item 4. A foreign-funded enterprise in WEDA, with examination and approval of the taxation authorities, will enable to accelerate depreciation of fixed assets.

Item 5. The foreign-funded enterprise, research and development center, which conform to the categories of Encouraged in the catalogue for the guidance of foreign investment industries, and the advanced tech oriented and product exported foreign-funded enterprise’s tech innovation shall be exempted from customs duties and import VAT when importing machinery and equipment or the relevant tech, component and spare part for self use, and the total value of its imported is within and conforming to the total investment scale and scope of business.

Item 6. The Research and development center, in accordance with certain Chinese regulations, shall be exempted from customs duties and import VAT when importing machinery and equipment or the relevant tech, component and spare part for self use, which can not be produced in China or the function can not meet the requirements.

Item 7. The foreign-funded enterprise, which conforms to the categories of Encouraged in the Catalogue for the Guidance of Foreign Investment industries, purchases the domestic machinery and equipment and if the machinery and equipment belongs to the scope of exempting tax within its total investment full VAT of purchased domestic machinery and equipment shall be refunded. A foreign-funded enterprise manages to deal with the innovation or produces the high and new technological products, which conform to the industrial policies of China, shall obtain redemption from the income tax of enterprises, when it purchases the domestic machinery and the equipment.

Item 8. The foreign-funded enterprise, research and development center, which conform to the categories of Encouraged in the catalogue issued by the middle and west of the china for the guidance of foreign investment industries, and the advanced tech oriented and product exported foreign-funded enterprise’s tech innovation shall be exempted from customs duties and import VAT when importing machinery and equipment or the relevant tech, component and spare part for self use, and the total value of its imported is within and conforming to the total investment scale and scope of business.

Item 9.The WEDA helps those foreign-funded enterprises which meet the certain requirements to apply for the high and new tech product, after the approval has been certified, in 3 years, the enterprise shall be refunded the 25% of the VAT handed in by the enterprises, which is also examined by tax authority.
The WEDA helps those foreign-funded enterprises which meet the certain requirements to apply for the State or Provincial new product, after the approval has been certified, in 3 years for the State level, and 2 years for the provincial level, the enterprise shall be refunded the 25% of the VAT handed in by the enterprises, which is also examined by tax authority. The refund shall be used for the tech innovation and developing.
From the registered date on, the WEDA shall, in accordance with the devotion made by those new foreign-funded enterprises to the finance of WEDA, refund 25% of the VAT handed in by the enterprises for 3 years.

Item 10.A foreign enterprise transfers the tech to China, if the tech is advanced or low-cost examined by certain departments of our State Council, the enterprise shall be exempted for the transfer tech business tax and income tax. To those enterprise that invest in the WEDA and purchase or rent the workshop, it will enjoy the policy that in the first 3 year of operating, 25% VAT handed in by the enterprise shall meet the one third of cost for enterprise to purchase or rent the workshop.

Item 11.In WEDA we establish regulations and set up fund on rewarding senior talents. The talents work in WEDA and get salary can obtain the bonus according to scope and net income of the enterprise that he or she serves and also their antecedents and position.
The maximum of the bonus is 600 thousand per person. This regulation is in accordance with "Regulation on attracting senior talent to set up business in WEAD".

Item 12. 24 items of administrative fee in the process of establishing an enterprise will be exempted according to "Provisional Regulation on Establishment Fee Free Area in WEDA".

Item 13. A foreign-invested enterprise is exempted from local income tax.

Item 14.The foreign -invested enterprise in WEDA can also enjoy other preferential policies regulated by the State? the Province? the Municipality and the Administrative committee.

Item 15. The Administrative Committee of WEDA retains the right to explain these regulations.