China, People's Republic of

Corporate - Significant developments

Last reviewed - 25 June 2021

China released a series of tax regulations in 2020 to support regional development in the Hainan Free Trade Port and the Lingang New Area of the Shanghai Pilot Free Trade Zone.

For the Hainan Free Trade Port:

  • Enterprises registered in the Hainan Free Trade Port with operational substance in the Hainan Free Trade Port engaged in the encouraged industries are entitled to a reduced corporate income tax (CIT) rate of 15%.
  • Enterprises registered in the Hainan Free Trade Port engaged in tourism, modern service, and high-tech industries are exempted from CIT on the income generated by new overseas direct investment made between 2020 and 2024.

For the Lingang New Area of the Shanghai Pilot Free Trade Zone:

  • From 1 January 2020, qualified enterprises engaged in substantial production or research and development (R&D) activities in key industries, such as integrated circuits, artificial intelligence, biomedicine, civil aviation, etc., in the Lingang New Area of the Shanghai Pilot Free Trade Zone are eligible for a reduced CIT rate of 15% for five years commencing from the date of establishment.