Which companies are eligible for preferential tax treatment under the New Investment Guidelines?
The tax implications of the New Investment Guidelines on Industries for Foreign Investments are clarified in a circular Guoshuifa 63. According to the regulation the new guidelines are applicable to projects whose feasibility studies were approved after April 1 2002. If the project did not need approval for its feasibility study the guidelines will apply if the company's contract, articles of association or application for capital expansion were approved after April 2002. Projects that are subject to the guidelines and fall under the classification encouraged projects are entitled to tax preferential policies. Projects approved before April 1 2002 that fall under the categories "encouraged" or "restricted B" under the old guidelines will also receive the preferential treatment provided for in the new regulations.
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