Group 1 - The announcement states that foreign investors using profits to replenish registered capital in domestic resident enterprises, thereby increasing paid-in capital or capital reserves, falls under the category of "new or increased paid-in capital or capital reserves of domestic resident enterprises" [1] - Foreign investors can choose to calculate the tax credit amount based on either 10% of the reinvestment amount or a lower dividend tax rate as stipulated in applicable tax treaties [1] - Once a tax rate is selected, it cannot be changed to a lower rate under tax treaties after holding the investment for 5 years when recovering the investment and declaring deferred taxes [1]

Domestic News - The third China International Supply Chain Promotion Expo opened in Beijing, with Vice Premier He Lifeng emphasizing China's role as a key player in global supply chains and its commitment to promoting mutual benefits and cooperation in the industry [1] - The Ministry of Commerce issued a notice to encourage foreign investors to reinvest profits in China through tax incentives, highlighting the importance of stabilizing investment expectations and reducing costs [1] - AMD announced plans to resume shipments of its MI308 products to China once the necessary export licenses are approved, following communication with the U.S. government [2] - Seven major potassium fertilizer distribution companies, including China Agricultural Materials Group, called for increased potassium supply and price reductions to stabilize the market [2] - Huawei regained the top position in China's smartphone market with an approximate 18% share in Q2, while competitors like Vivo and OPPO saw declines [2] International News - European Central Bank board member Nagel stated that a "steady hand" is needed to address uncertainties arising from U.S. tariffs, indicating geopolitical tensions affecting prices [4] - U.K. inflation rate rose to 3.6% in June, exceeding expectations, as the Bank of England predicts inflation may peak at 3.7% in September [4] - In June, foreign investors net sold $2.11 billion in bonds from five Asian countries, marking the first monthly outflow in five months, with Indonesia experiencing the largest outflow [4] Market Overview - The Indonesian central bank cut interest rates by 25 basis points, aligning with expectations of decreasing inflation in 2025 and 2026 [5] - The Shanghai Composite Index closed at 3503.78, down 0.03%, while the Shenzhen Component Index fell 0.22% to 10720.81 [5] - The onshore RMB was at 7.1776, appreciating by 32 points, while the offshore RMB remained stable at 7.1824 [5]

Core Viewpoint - The Ministry of Commerce has issued a notice regarding the implementation of tax credit policies for foreign investors directly investing through profit distribution [1] Group 1 - Provincial commerce authorities are required to collaborate with finance, taxation, and foreign exchange departments to establish a cross-departmental management service mechanism for tax credit [1] - The notice emphasizes the need for a specific workflow to be developed for the implementation of the tax credit policy [1] - There is a call for enhanced collaboration with market regulation departments to ensure proper qualification review and regulatory responsibilities are fulfilled [1] Group 2 - The notice mandates adherence to information sharing requirements as outlined in Article 6 of the announcement [1]

Core Viewpoint - The announcement outlines a tax credit policy for foreign investors reinvesting profits distributed by Chinese resident enterprises, effective from January 1, 2025, to December 31, 2028, allowing a 10% tax credit on the reinvestment amount against the annual taxable income of the foreign investor [3][10]. Summary by Sections Tax Credit Policy - Foreign investors can receive a tax credit of 10% on the amount reinvested in China from profits distributed by Chinese resident enterprises during the specified period [3][10]. - If the applicable tax rate under tax treaties with foreign governments is lower than 10%, the treaty rate will apply [3]. Conditions for Eligibility - The profits must be actual distributions from Chinese resident enterprises, classified as dividends or similar equity income [3]. - Eligible reinvestments include capital increases, new establishments, and equity acquisitions, excluding purchases of listed company shares (with some strategic investment exceptions) [3][4]. - The reinvested profits must be in cash or directly transferred assets without intermediary holding [6]. Investment Duration and Compliance - Foreign investors must hold the reinvested assets for at least 5 years (60 months) to qualify for the tax credit [5]. - Upon withdrawal of investments before the 5-year period, investors must pay deferred taxes and may have their tax credit reduced proportionally [7]. Reporting and Verification - Foreign investors must report relevant information through the unified platform managed by the Ministry of Commerce, including details about the reinvestment and the involved enterprises [8]. - Local commerce departments will verify the submitted information and confirm eligibility for the tax credit [8]. Special Conditions - If the invested enterprises undergo restructuring that meets specific criteria, they can continue to enjoy the tax credit [9]. - The policy will be enforced from January 1, 2025, to December 31, 2028, with provisions for any remaining tax credit balances to be utilized until exhausted [10].

Core Viewpoint - The announcement by the Ministry of Finance, State Taxation Administration, and Ministry of Commerce introduces tax incentives for foreign investors who reinvest profits distributed by Chinese resident enterprises into domestic direct investments from January 1, 2025, to December 31, 2028, allowing a 10% tax credit against their taxable income for the investment amount [1][3]. Group 1: Policy Details - The new policy allows foreign investors to offset 10% of their taxable income with profits reinvested in eligible domestic projects, which can be carried forward if not fully utilized in the current year [1][3]. - The policy expands the scope of eligible projects for reinvestment, now including all non-prohibited foreign investment projects, enhancing the previous tax exemption policy established in 2018 [1][2]. - To qualify, the profits must be actual distributions from Chinese resident enterprises and used for direct investments such as capital increases, new projects, or equity acquisitions, excluding certain stock purchases [2][3]. Group 2: Investment Conditions - Foreign investors must hold their reinvested profits for at least 5 years (60 months) to benefit from the tax incentives, promoting long-term investment strategies [2][3]. - The reinvestment must be made in cash directly from the profit distribution enterprise to the investment entity, or through the direct transfer of assets in non-cash forms [2]. - If foreign investors withdraw their investments before the 5-year period, they must pay deferred taxes and may have their tax credit reduced proportionally [3].

Core Viewpoint - The announcement outlines a tax credit policy for foreign investors reinvesting profits distributed by Chinese resident enterprises, effective from January 1, 2025, to December 31, 2028, allowing a 10% tax credit on the reinvestment amount against the annual taxable income of foreign investors [2][7]. Summary by Sections Tax Credit Policy - Foreign investors can offset 10% of their reinvestment amount against their taxable income if the profits are reinvested in eligible domestic investments from January 1, 2025, to December 31, 2028 [2][3]. - If the tax treaty with a foreign government stipulates a lower tax rate on dividends and similar income, that rate will apply [2]. Eligibility Criteria - The profits must be actual distributions from Chinese resident enterprises, classified as dividends or similar equity income [2]. - Eligible reinvestments include capital increases, new establishments, and equity acquisitions, excluding stock purchases of listed companies (with some strategic investment exceptions) [2][3]. - The reinvestment must be in industries listed in the "Encouraged Foreign Investment Industry Catalog" [3]. - Foreign investors must hold the reinvested assets for at least 5 years [3]. Payment and Documentation - Profits used for reinvestment must be paid in cash directly from the profit-distributing enterprise to the invested enterprise, without prior circulation in other accounts [3]. - Documentation must be provided to the profit-distributing enterprise to avoid withholding tax on the reinvested profits [4]. Withdrawal and Tax Obligations - After 5 years, if foreign investors withdraw their investments, they must report and pay any deferred taxes within 7 days [5]. - If investments are withdrawn before 5 years, the tax benefits will be recalibrated, and any excess credits must be repaid [5]. Reporting Requirements - Foreign investors must report their reinvestment details through a unified platform managed by the Ministry of Commerce, including information about the invested enterprises and the amounts involved [5][6]. - The local commerce department will verify the submitted information and report to the provincial level [6]. Special Conditions - If the invested enterprise undergoes a restructuring that meets specific conditions, the tax credit policy can still be applied [6]. Implementation Timeline - The policy is effective from January 1, 2025, to December 31, 2028, with provisions for any remaining tax credits to be utilized until exhausted [7].

Core Viewpoint - The Chinese government has introduced a tax credit policy to encourage foreign investors to reinvest profits in domestic enterprises from January 1, 2025, to December 31, 2028, allowing eligible investors to offset 10% of their taxable income against their investment amount [1][2]. Group 1: Policy Details - The new policy allows foreign investors to enjoy tax credits on profits distributed by Chinese resident enterprises, applicable to direct investments such as capital increases, new establishments, and equity acquisitions, excluding certain stock purchases [2]. - The policy requires that the reinvested profits must be retained earnings distributed as dividends or similar equity investment returns, and the investment must be held for at least 5 years [2][3]. - If foreign investors withdraw their investments before the 5-year period, they will lose the tax credit benefits and must repay any deferred taxes [3]. Group 2: Historical Context - This policy builds on a previous initiative from 2017, which exempted foreign investors from withholding income tax on reinvested profits, further promoting foreign investment in China [1].

Core Points - The Chinese Ministry of Finance, State Taxation Administration, and Ministry of Commerce announced a tax credit policy for foreign investors using distributed profits for direct investment in China from January 1, 2025, to December 31, 2028 [1] - Foreign investors can offset 10% of their taxable income for the amount invested, with any unused credits allowed to be carried forward to future years [1] - The policy applies to profits distributed by Chinese resident enterprises and requires that the reinvestment meets specific conditions [1] Summary by Categories - **Policy Announcement** - The announcement details a new tax credit policy for foreign investors in China [1] - The policy is effective from January 1, 2025, to December 31, 2028 [1] - **Tax Credit Details** - Foreign investors can receive a tax credit of 10% of the amount invested from distributed profits [1] - Any unused tax credits can be carried forward to subsequent years [1] - **Eligibility Criteria** - Profits must be actual distributions from Chinese resident enterprises [1] - Investments must include capital increases, new projects, or equity acquisitions, excluding certain stock purchases [1] - The invested enterprise must operate in industries listed in the "Encouraged Foreign Investment Industry Catalog" [1] - A minimum holding period of 5 years (60 months) is required for the reinvestment [1] - Cash investments must be directly transferred from the profit distribution enterprise to the invested enterprise [1] - Non-cash investments must have ownership transferred directly without intermediary holding [1]

关于境外投资者以分配利润直接投资税收抵免政策的公告 来源：财政部网站 三部门发布境外投资者以分配利润直接投资税收抵免政策 财政部 税务总局 商务部公告2025年第2号 （一）境外投资者分得的利润属于中国境内居民企业向投资者实际分配的留存收益而形成的股息、红利等权益性投资收益。 （二）境外投资者以分得利润进行的境内直接投资，包括境外投资者以分得利润进行的增资、新建、股权收购等权益性投 资，但不包括新增、转增、收购上市公司股份（符合条件的战略投资除外）。具体是指： 1.新增或转增中国境内居民企业实收资本或者资本公积； 2.在中国境内投资新建居民企业； 3.从非关联方收购中国境内居民企业股权。 境外投资者采取上述投资方式所投资的居民企业统称为被投资企业。 为贯彻落实党中央、国务院决策部署，按照企业所得税法及其实施条例有关规定，现就境外投资者以分配利润直接投资有关 税收优惠政策公告如下： 一、境外投资者以中国境内居民企业分配的利润，在2025年1月1日至2028年12月31日期间用于境内直接投资符合条件的， 可按照投资额的10%抵免境外投资者当年的应纳税额，当年不足抵免的准予向以后结转。中华人民共和国政府同外国政府订 ...

6月30日，财政部、国家税务总局、商务部发布《关于境外投资者以分配利润直接投资税收抵免政策的公 告》（下称《公告》），明确在2025年1月1日至2028年12月31日期间，境外投资者以中国境内居民企业分 配的利润用于境内直接投资（下称"境外投资者以分配利润直接投资"）的，若符合条件可享受税收抵免。 随着开放型经济发展，外商投资企业不断融入我国经济，以分配利润进行的再投资活动也越来越多。2017年， 财政部等四部门曾出台境外投资者以分配利润直接投资暂不征收预提所得税政策，将大部分境外投资者在华投 资的现有方式纳入暂不征税的适用范围，鼓励境外投资者持续在华投资经营。 本次《公告》也将进一步鼓励境外投资者持续在华投资。《公告》明确，符合条件的境外投资者可按照投资额 的10%抵免境外投资者当年的应纳税额，当年不足抵免的准予向以后结转。此外，中华人民共和国政府同外国 政府订立的税收协定中关于股息、红利等权益性投资收益适用税率低于10%的，需按照协定税率执行。 境外投资者境内再投资需连续持有至少5年以上 《公告》明确要求，享受税收抵免政策需同时符合5项条件: 一是境外投资者分得的利润属于中国境内居民企业向投资者实际分配的 ...