China, People's Republic of

Corporate - Significant developments

Last reviewed - 05 January 2021

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

For 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 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 Lingang New Area of Shanghai Pilot Free Trade Zone:

  • From 1 January 2020, qualified enterprises engaged in substantial production or R&D activities in key industries such as integrated circuits, artificial intelligence, biomedicine, civil aviation, etc., in Lingang New Area of Shanghai Pilot Free Trade Zone are eligible for a reduced CIT rate of 15% for 5 years commencing from the date of establishment.