On 1 June 2022, the Department of Finance of Guangdong Province and Guangdong Provincial Tax Bureau forwarded a Circular (Caishui [2022] NO.19) issued by the Ministry of Finance and State Taxation administration on the preferential corporate income tax (CIT) policies in Hengqin Guangdong-Macao In-Depth Cooperation Zone on the official website.

According to the Circular, starting from 1 January 2021, the corporate income tax will be levied at a reduced rate of 15% for qualified enterprises registered in Hengqin Guangdong-Macao In-Depth Cooperation Zone (the standard corporate income tax rate in China is 25%). The Circular also released a Corporate Income Tax Preferential Catalogue of Hengqin Guangdong-Macao In-Depth Cooperation Zone (2021 Edition).

Enterprises that can enjoy the reduced corporate income tax rate of 15% shall meet the following conditions:

1. Engage in the industries listed in the Corporate Income Tax Preferential Catalogue of Hengqin Guangdong-Macao In-Depth Cooperation Zone (2021 Edition);
2. The main business income shall account for 60% or more of their total income;
3. Conduct substantive operations in Hengqin Guangdong-Macao In-Depth Cooperation Zone, which means they shall set up a management organization in Hengqin, implementing management for production, personnel, accounting and etc.

The Corporate Income Tax Preferential Catalogue of Hengqin Guangdong-Macao In-Depth Cooperation Zone (2021 Edition) covers 9 categories, i.e., high-tech industry, science and education research and development, traditional Chinese medicine industry, medical and health industry, other Macao brand industries, cultural exhibition and trade industry, tourism, modern service industry and modern financial industry, with a total of 150 sub-industries. Compared with the previous corporate income tax preferential catalogue of Hengqin new area, the 2021 edition covers more industries.

In addition, the Circular also specifies that income obtained from the new overseas direct investment of the tourism, modern service and high-tech enterprises established in Hengqin Guangdong-Macao In-Depth Cooperation Zone is exempt from corporate income tax. One-time pretax deduction or accelerated depreciation is allowed for newly purchased fixed assets or intangible assets of enterprises established in Hengqin Guangdong-Macao In-Depth Cooperation Zone according to different value ranges.

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