In recent years, China has issued a series of preferential tax policies to boost the development of agricultural production. Kaizen has summarized the preferential tax policies which may be enjoyed by agricultural producers based on the Guideline of Preferential Tax Policies on Supporting the Development of Rural Areas for our existing and potential clients’ reference.

VAT Exemption Policies

1. Agricultural producers selling self-produced agricultural products
   Primary agricultural products produced by units and individuals engaged in planting, breeding, forestry, animal husbandry and aquaculture are exempted from VAT.
   
   
2. Import of seeds and seed resources
   Imported seeds in the VAT Exemption List could be exempted from import VAT during the period from 1 January 2021 to 31 December 2025. Pursuant to the Imported Seeds and Seed Resources VAT Exemption List (First Batch), “seeds and seed resources” refers to plant seeds and seedlings, breeding stock and poultry and fish fry.
   
   
3. Import of corn bran, rice bran and other fodder
   As approved by the State Council, imported fodder in the VAT Exemption List is exempt from import VAT.
   
   
4. Circulation of single bulk fodder
   Single bulk fodder, mixed feed, compound feed, compound premix, concentrated feed produced and sold by fodder production enterprise is exempt from VAT.
   
   
5. Production and sales of organic fertilizer
   Starting from 1 June 2008, taxpayers producing, selling, wholesale, or retail of organic fertilizer are exempt from VAT.
   
   
6. Production and sales of drip irrigation products
   Starting from 1 July 2007, taxpayers producing, selling, wholesale or retails of drip irrigation tape and pipe are exempted from VAT.  
   
   
7. Production and sales of agricultural film
   Taxpayers producing, selling, wholesale or retails of agricultural film are exempted from VAT. 
    
8. Wholesale or retail of seed, seedling, pesticide, agricultural machinery
   Taxpayers selling seed, seedling, pesticide, agricultural machinery are exempted from VAT.
   
   
9. Rendering of agricultural service
   Taxpayers providing agricultural machine farming, irrigation and drainage, disease and insect pest control, plant protection, agricultural and animal husbandry insurance and related technical training services, poultry, livestock, aquatic animal breeding and disease prevention and control, are exempt from VAT.
   
   
10. Sales of livestock and poultry in the operation mode of “Company+Farmer”
    Taxpayers engaged in the livestock and poultry raising in the operation made of “company + farmer” by purchasing the livestock and poultry from cooperated farmers and reselling are exempted from VAT.
    
    
11. Specialized farmer cooperatives selling agricultural products produced by the members
    Specialized farmer cooperatives selling agricultural products produced by the members are exempted from VAT.
    
    
12. Specialized farmer cooperatives selling part of agricultural materials to the members
    Specialized farmer cooperatives sell agricultural film, seeds, seedling, pesticide, agricultural machinery are exempted from VAT.

Corporate Income Tax Exemption and Reduction Policies

Taxpayers engaged in the following agriculture, forestry, animal husbandry and fishery projects or companies engaged in the following agriculture, forestry, animal husbandry and fishery projects by adopting the operation mode of “Company+Framer” can enjoy exemption or reduction policies for corporate income tax.

Items exempted from corporate income tax

(1)	Planting of vegetable, grain, potato, oil, beans, cotton, hemp, sugar, fruits, nuts;
(2)	Breeding of new crop varieties;
(3)	Planting of traditional Chinese medicinal materials;
(4)	Cultivation and planting of forest;
(5)	Raising of livestock and poultry;
(6)	Collection of forest products;
(7)	Agriculture, forestry, animal husbandry and fishery service projects, such as irrigation, primary processing of agricultural products, veterinary medicine, agricultural technology development, agricultural machinery operation and maintenance;
(8)	Deep-sea fishing

Items entitled for half-deduction of corporate income tax
(1) Planting of flowers, tea and other drinking and flavor plants;
(2) Mariculture and inland aquaculture.

KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advice and services in respect of the formation and registration of company, application for various business licences and permits, any compliance, tax planning, audit, and accounting in China. Please call and talk to our professional consultants for details.