外资利好！三部门重磅发文

Core Viewpoint - The recent announcement by the Ministry of Finance, State Taxation Administration, and Ministry of Commerce introduces a tax credit policy for foreign investors reinvesting profits distributed by Chinese resident enterprises from January 1, 2025, to December 31, 2028, encouraging sustained foreign investment in China [1][3]. Group 1: Tax Credit Policy Details - Foreign investors can enjoy a tax credit of 10% of the investment amount against their taxable income for the year, with any unused credits eligible for carryover to future years [1][3]. - The policy aims to further encourage foreign investors to continue investing in China, building on a previous policy from 2017 that exempted many foreign investors from withholding tax on reinvested profits [1][3]. Group 2: Eligibility Criteria - To qualify for the tax credit, foreign investors must meet five specific conditions, including that the profits must be actual distributions from Chinese resident enterprises and used for direct investments such as capital increases or acquisitions [3][4]. - The reinvestment must be in industries listed in the "Encouraged Foreign Investment Industry Directory" [3][4]. Group 3: Investment Holding Period - Foreign investors are required to hold their reinvestments for at least 5 years (60 months) to benefit from the tax credit [4][5]. - If investments are withdrawn before the 5-year period, the corresponding profits will not qualify for the tax credit, and investors must pay deferred taxes [6][7]. Group 4: Compliance and Management - Foreign investors must provide documentation to the profit-distributing enterprises to prove compliance with the policy [7]. - Relevant authorities will monitor compliance and report any discrepancies to tax departments for potential tax recovery [7].