These preferential policies are formulated in accordance with Supervision Methods of Free Trade Zone Customs by the State Council and the related law, regulations and policies of the State, and in the light of specific conditions of Zhangjiagang Free Trade Zone

【Preferential Policies On Tax】
1.The income tax rate for foreign-funded manufacturing enterprises is 15%. They will enjoy an exemption from income tax in the first two years commencing the profit-making year, and a 50% reduction of income tax from the third through fifth year. The enterprise income tax will be levied at the rate of 7.5% during half-reduction period. Local income tax is exempted.

Enterprises engaged in export will pay income tax at a reduced rate of 10% provided that their exported products of the year exceed 70% of the total production. Technologically advanced enterprises conforming to encouragement policies of the State will pay income tax according to the tax regulations. The payment of enterprise income tax at a reduced rate of 10% may be extended to the technologically advanced enterprises for three years on the expiration of exemption and reduction period after being approved.

Chinese-funded manufacturing enterprises can enjoy preferential policies on income tax after being approved.

2.Foreign investment enterprises engaged in infrastructure projects such as ports and terminals will enjoy an exemption from income tax for first five years and a 50% reduction for another five years.

3.The houses that have been built or bought by enterprises shall be exempted from real estate property tax for 5 years, beginning from the month when houses are built or bought. If, under special circumstance, enterprises find it necessary to have a cut short of the terms of depreciation of their fixed assets, they shall submit an application to the related taxation authorities for approval. After being approved, the terms of depreciation can be shortened.

4.Enterprises engaged in the processing and trade of bonded goods are exempted from VAT and consumption tax. The enterprises in the Zone will handle procedures for export refund if they purchase goods from the non-Free Trade Zone enterprises with import & export right for exportation or reprocess these goods for exportation, conforming to the conditions of export refund.

5.If foreign investment enterprises invested in Encouraged Projects and Restricted Projects(class B) by the state purchase the Chinese-made equipment together with plastic parts, rubber parts and ceramic parts, pipe materials in petrochemical projects, VAT paid can be drawn back. The investment capital used in purchasing Chinese-made equipment can countervail enterprise income tax.

6.Enterprises with fixed working places and personnel and having worked regularly in the Zone can enjoy certain construction subsidies by the Administrative Committee of Zhangjiagang Free Trade Zone.