Chinese finance authorities are extending preferential tax credit policies for foreigners who reinvest their profits in the country, offering tax exemptions on 10 percent of the amount reinvested.
The Ministry of Finance, State Taxation Administration and Ministry of Commerce announced the policy on June 30 that will benefit foreign investors who reinvest profits earned in China from January 1, 2025 to December 31, 2028. The tax credit can be used to reduce other taxable liabilities, and unused amounts can be carried forward. The investment must be locked in for at least five years.
The policy aims to encourage long-term investment in industries on the national list announced in 2022, where foreign investment is encouraged. A new list is expected to be released within the year, with more support for priority areas, such as advanced manufacturing, green industries, modern agriculture and the digital and high-tech sectors, according to the National Development and Reform Commission.
Experts said the new policy will help attract long-term foreign investment and further improve and stabilize the country’s investment environment.
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