1. Technology and knowledge-intensive projects

All the EFIs that are engaged in technology and knowledge-intensive projects may apply to the competent tax authority for a tax reduction. When reviewed by the competent tax authority and the municipal office of SAT and finally approved by the State Administration of Taxation, an income tax rate of 15% shall apply.

2. Port/dock construction and other specified projects

Under the implementation rules of the Tax Laws, EFIs that are engaged in energy, transportation, infrastructure projects such as ports, docks, airports, railways, roads, power plants, coal mines, water conservatory, and in agricultural development (hereinafter as specified projects), if they meet the requirements in terms of the business type and project location, shall be offered preferential tax treatment including a reduced tax rate and tax holidays.

(1)Only those EFIs that directly fund and run the specified projects can enjoy the tax incentives and concessions for specified projects. Enterprises as contractors of the construction for the specified projects are not covered.

(2)Where EFIs funding and running specified projects undertake non-specified projects at the same time, the income, expense and the corresponding taxable income in connection with the specified projects and non-specified ones should be declared separately. Enterprise income taxes are payable at the applicable rates for specified and non-specified projects and regulations on tax holidays should be taken into account. If the EFIs are unable to declare the amount clearly and separately, or the declared amount is not reasonable in the view of the competent tax authority, the tax authority may verify the total taxable income and assess the tax payable based on the proportion of specified projects and non-specified projects in business income or other reasonable ratios.

As approved by the Sate Council, since January 1st, 1999, the provision under the implementation rules of the Tax Laws that production-oriented EFIs running specified projects like energy, transportation and infrastructure may enjoy a reduced enterprise income tax rate of 15% with the approval of the State Administration of Taxation shall apply across the country.