Western China pushes for prioritized industries by prolonging enforcement of preferential tax policy until 2030

Western China pushes for prioritized industries by prolonging enforcement of preferential tax policy until 2030

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Recently, the Ministry of Finance, the State Administration of Taxation, and the National Development and Reform Commission released the latest announcement on issues concerning the enhancement of China’s western region development strategy with regards to enterprise income taxation.

The announcement states that from January 1, 2021 to December 31, 2030, any enterprise that is located in the western regions and engaged in the industrial activities as listed in the "Catalog of Encouraged Industries in Western Regions" as its main business, from which the revenue in the current year accounts for more than 70% of its total revenue, shall pay 15% enterprise income tax after its application is approved by the taxation authorities.

Western China includes Inner Mongolia, Guangxi, Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang. Xiangxi Tujia and Miao Autonomous Prefecture in Hunan province, Enshi Tujia and Miao Autonomous Prefecture, Yanbian Korean Autonomous Prefecture, and Ganzhou also apply this policy.

According to the "Catalog of Encouraged Industries in Western Regions", Gansu, Qinghai, Ningxia, Xinjiang, and Inner Mongolia recognize both wind power and solar power among the prioritized industries; meanwhile, Tibet only prioritizes the solar power industry and Yunnan supports only businesses that focus on battery technology. (GOV)