Enterprise income tax
The Enterprise Income Tax Law of the People's Republic of China started to be enforced on Jan.1, 2008. Among its stipulations are:

The tax rate for enterprise income is 25%.

An enterprise's "taxable income" refers to the remainder of its total income for the tax year concerned minus all non-taxable incomes, exemptions, deductibles, and deductible losses of the previous year.

The sum of all monetary and non-monetary revenues from all kinds of sources constitutes the enterprise's total income.

The following items in the total income are non-taxable:

1. government-allocated funds;
2. charges for administrative purposes and payable to the state's revenue or governmental funds.
3. other incomes the State Council sets aside as not liable to taxation

The state adopts preferential tax policies regarding the income of enterprises engaged in industries and projects which have received special encouragement and supports from the state.　

The following incomes of an enterprise are not subject to taxation:

1. the interest income from government-issued bonds;
2. a qualified resident enterprise's entitlement income from investing in the stocks and bonds of other qualified resident enterprises;
3. a non-resident enterprise's entitlement income derived from investing in resident enterprises and substantially related to the organization or the site it has set up in China;
4. the income of qualified nonprofit organizations.
   
   An enterprise's following incomes are tax-exempt or tax-deductible:

1. incomes from undertaking projects in agriculture, forestry, animal husbandry, and fishery;
2. incomes from undertaking public works or infrastructure projects to which the state gives priority;
3. incomes from qualified projects for environmental protection or to save water;
4. incomes from qualified transfer of technologies;
5. other incomes stipulated in Section IV, Article 27 of the Enterprise Income Tax Law.
   
   Circulation-related Taxes
   VAT for enterprises: 17% in general and 13% for some industries; consumption tax: 3-45%;
   Business tax: 3-20%.
   Stamp tax: 0.5-10/10,000.
   License tax for vehicles: varying according to capacity, tonnage or number of vehicles.
   Contract and title tax: 3-5%.
   
   Property tax for foreign investor-owned real estates in urban areas
   
   FDI enterprises- or foreigners-owned properties are liable to urban real estate tax. If using the remainder of the original value of the property concerned minus 10-30% of that value as the basis for taxation, the annual rate would be 1.2%; if using the sum of rental incomes from the property concerned as the basis for taxation, the annual rate would be 12%. Property tax is paid annually, in installments.

Personal Income Tax

Level    Monthly Taxable Income (RMB)*        Tax Rate
1.            up to 500                            5%
2.            501 to 2,000                        10%
3.            2,001 to 5,000                      15%
4.            5,001 to 20,000                     20%
5.            20,001 to 40,000                    25%
6.            40,001 to 60,000                    30%
7.            60,001 to 80,000                    35%
8.            80,001 to 100,000                   40%
9.            the amount over 100,000             45%

* "Monthly taxable income" refers to the remainder of the total monthly income minus the RMB 2,000 deductable or minus applicable surcharges.

Preferential Policies

1. New FDI enterprises or existing FDI enterprises just adding new funds to their investment, should their lines of business fall into the "Encouraged" category on China's Classified Catalogue of FDI Industries (Revised Edition of 2007), are allowed to import, duty- and VAT-free, equipments and related technologies and spare parts for use in their own projects, as long as the total value of the imports does not exceed the total amount of their investments. Equipments, etc. which are listed on the Catalogue of Imported Commodities Not Entitled to Tax Exemption do not enjoy this preferential treatment.
2. For the purpose of technological renovation and upgrading, existing "Encouraged" or "Restricted B" category FDI enterprises, R&D institutes, high-tech intensive or export-oriented companies are allowed to import, duty- and other importation taxes-free, equipments and related technologies or spare parts in accordance with the State Council's 1997 Notification on Adjusting the Tax Policies on Imported Equipments, provided that the said equipments etc. are consistent with these enterprises' lines of business, and that home-made substitutes are either not available or less than adequate for the purpose.
3. With respect to enterprises established by foreign-invested enterprises beyond central-western region by reinvestment and enterprises established by foreign-invested enterprise in central-western region by reinvestment in which the foreign investment accounts for less than 25%, the projects they invest in shall be done in accordance with foreign investment industrial policies, in particular, with respect to projects falling within the encouraged category of the Catalogue of Industries for Guiding Foreign Investment or the industry list of the Catalogue of Priority Industries for Foreign Investment in the Central-Western Region, the self-use equipments imported within their aggregate investment shall be exempted from customs duties and value-added tax in the linkage of import except those listed in the Catalogue for Foreign Investment Projects of Import Commodities Not Exempted from Tax.
4. FDI enterprises belonging to the "Encouraged" category on the Classified Catalogue of FDI Industries enjoy remission on the VAT they have paid for purchasing equipments made in China. Should a new and revised edition of the Catalogue be published in the process of completing the project concerned, the edition which was current at the time when the project in question was officially approved should continue to be used for this purpose.

Regulations on Foreign Exchange
China's official "Administrative Regulations on Foreign Exchange" stipulates that
1. FDI enterprises are allowed to send their after-tax profits abroad;
2. FDI enterprises are allowed to convert their RMB revenue to foreign currencies under current accounts;