At present, a tax system is in effect to ensure that "preferential treatment is mainly granted to industries, with regional preferences as a complement."

These preferential tax policies include:

(1) High-tech enterprises enjoy apreferential tax rate of 15;

(2) From January 1, 2021 to December 31, 2022, for the portion of taxable income not exceeding 1 million yuan, the amount of taxable income may be halved from 25percent to 12.5 percent and enterprise income tax will be levied at 20 percent for small, low-profit enterprises. From January 1, 2022 to December 31, 2024, for the portion of taxable income exceeding 1 million yuan but not surpassing 3 million yuan, the amount of taxable income will be reduced to 25 percent and enterprise income tax will be levied at 20 percent for small, low-profit enterprises;

(3) Effective through December 31, 2030, enterprises in western China in industries designated by the government for special encouragement shall enjoy a preferential tax rate of 15 percent;

(4) Starting from the tax year that production/operation income is first generated, enterprises engaged in public infrastructure projects with major support from the government shall enjoy the "three-year exemption and three-year half rate" enterprise income tax incentive;

(5) Enterprises engaged in agriculture, forestry, animal husbandry, or fishery projects shall pay enterprise income tax at a reduced rate or be exempted from it;

(6) Starting from the tax year that production/operation income is first generated, enterprises engaged in eligible environmental protection or energy/ water conservation projects shall enjoy the "three-year exemption and three-year half rate" enterprise income tax incentive. Enterprises purchasing specialized equipment for environmental protection, energy or water conservation, or production safety, 10 percent of the investment in equipment can be deducted from the tax amount payable;

(7) A weighted deduction of 75 percent of an enterprise's R&D expenditures shall be applied after the actual enterprise R&D expenditure is taken out in accordance with regulations; where enterprise R&D expenditure generates intangible assets, 175 percent of the cost of intangible assets shall be amortized. At the same time, the rate of extra tax deductions on the R&D costs of manufacturing and technology-based SMEs is raised from 75 percent to 100 percent. With respect to the R&D expenses actually incurred by a technology-based SME when it conducts any R&D activity, an extra 100 percent of the amount of R&D expenses actually incurred shall be deducted before tax payment, in addition to the deduction of actual expenses as prescribed, from January 1, 2022, provided that the said expenses are not converted into intangible assets and included in the current profits and losses; and if the said expenses have been converted into intangible assets, such expenses may be amortized at the rate of 200 percent of the costs of the intangible assets before tax payment from January 1;

(8) Enterprise income from technology transfer not exceeding 5 million yuan within a tax year shall be exempted from the enterprise income tax; that which exceeds 5 million yuan shall be taxed at half of the rate. From January 1, 2020, resident enterprises registered in specific areas of the Zhongguancun National Independent Innovation Demonstration Zone will be exempted from enterprise income tax for the portion of eligible technology transfer income not exceeding 20 million yuan in a tax year and will be exempted from enterprise income tax by half for the portion exceeding 20 million yuan.

(9) Starting from the tax year that production/operation income is first generated, newly founded high-tech enterprises located in any of China's five special economic zones (Hainan, Shenzhen, Xiamen, Zhuhai, and Shantou) or the Shanghai Pudong New Area shall enjoy a "two-year exemption and three-year half rate" enterprise income tax incentive;

(10) Venture capital enterprisesmaking eligible venture capital investments can enjoy deduction for the tax amount payable at a certain percentage of the amount invested;

(11) Income from equity investments, including interest earned from the government bonds and stock dividends of resident enterprises, as well as certain specified income of non-profit organizations, are exempted from the enterprise income tax;

(12) Foreign investors reinvesting their profits in China are temporarily exempted from the withholding income tax;

(13) Eligible cutting-edge serviceenterprises across the nation shall pay the enterprise income tax at a reduced rate of 15 percent;

(14) Tariffs, as well as value-added taxes and consumption taxes in the import link, are exempted from January 1, 2021, to December 31, 2025 for articles imported by scientific research institutions, technological development institutions, and schools for scientific research, technological development and teaching that China fails to produce or whose domestic counterpart fails to meet the demand due to inadequate Foreign-invested R&D centers that meet the conditions can enjoy this policy.