China has decided to grant a package of preferential tax
policies to its rust belt in northeast China, which includes the
provinces of Heilongjiang,
Jilin
and Liaoning.
According to the document released by the Ministry of Finance
and State Administration of Taxation, the policies include the
adjustment of value-added tax, resources tax and corporate income
tax.
The document stipulates corporate taxpayers in equipment
manufacturing, oil and petrochemical sectors, metallurgical and
ship-building and auto sectors and farm produce processing industry
might use the amount of the new value-added tax to cover designated
taxes. That include taxes on their purchased fixed assets, goods to
be made by the taxpayer as fixed assets, labor services or fees
paid for shipment of fixed assets.
With approval of provincial governments, a deduction of no more
than 30 percent of the amount of resources tax to be paid is
applicable to oil fields with low oil abundance or mines with
little exploitable mineral resources, according to the
document.
The corporate income tax policies include no more than 40
percent drop in period of depreciation of fixed assets of
manufacturing companies in northeast China, excluding houses and
structures, and of intangible assets that were bought or
invested.
The amount of salary that is tax exempt is 1,200 yuan (US$146),
compared with 800 yuan (nearly US$100) for other areas in
China.
Northeast China used to the major industrial center in China
from 1949 to the late 1970s. Since China opened up to the outside
world, it has lagged far behind coastal areas, which absorbed far
more overseas investment.
(Xinhua News Agency September 26, 2004)
