Shanghai preferential investment policy 021-68877368
In order to enjoy the most favorable tax policies, Shanghai investment preferential policies are required to be known before registering a company. Shanghai tax preferential policy is more competitive comparing with other mainland provinces or cities, which is an essential factor to attract investors from domestic and overseas. After the implementation of the new Corporate Income Tax Law, the preferential tax reduction and exemption policies (except for some encouraged industries or products) will be canceled. Either domestic or foreign-funded enterprises will under unified policy same as native. The preferential tax policies of Shanghai company are mainly based on tax return. That is, after the company pays tax, part of the tax will be returned to the corporate. Including business tax, value-added tax and corporate income tax.The tax rebate policies vary greatly for different zones as well.
Shanghai is an international financial metropolis attracting worldwide attention. She plays a very important role no matter in the national economic construction or social development. Shoulders the important task of facing the world and serving the whole country. Although this city's population is only 1% of the country's total and land area covers only 0.06% of the country's total urban area. She generates a huge amount of fiscal income(accounting for one-ninth of the country's total), the total amount of import and export commodities accounted for a quarter of the country, and the throughput of port goods accounted for a tenth of the country. She leads to reform and opening up, industrial upgrading, scientific and technological innovation. Her highly developed finance, trade, tourism, shipping, information, real estate and other fields are gradually catching up with the world level. The improving legal system have created an excellent investment environment for Shanghai. Grab your chance invest in Shanghai, you will obtain more extensive development space for your business.
1.National and Local Tax Sharing System
National fiscal: 75% value added tax, 60% income tax
Local (provincial/municipal) fiscal: 25% value-added tax , 40% income tax
2. Shanghai Tax Sharing System
Shanghai's taxation is divided by the governments at all levels. Except for the tax reserve of the state, local taxation is divided by the Shanghai municipal government, district government, development zone and enterprises.
Tax sharing ratio of Shanghai:
Chongming district accounts for 0% of municipal finance, 30% of district finance, 30% of development zone, and more than 40% of enterprises;
Jinshan district finance accounts for 40%, district finance accounts for 15%, development zone accounts for 10%, enterprise accounts for more than 35%;
Other suburban cities accounting for 40%, district accounting for 20%, development zone accounting for 10-15%, enterprises accounting for more than 25%;
Urban finance accounts for 40%, district finance accounts for 30%, development zone accounts for 20% and enterprise accounts for 10%.
3.The Proportion of Tax Return for Enterprises in Shanghai
a. Maximum tax rebate: Chongming district
Currently, only Chongming in Shanghai enjoys "island preferential policies".The Shanghai municipal government does not take tax commission, and all the tax is left to Chongming district, so the tax rebate that Chongming can give to enterprises is the highest in Shanghai.
b. Higher tax return: Jinshan district
Jinshan district is one of the most heavily supported suburbs in Shanghai, and its tax rebates are much bigger than those in other suburbs.
c. General tax rebate
Except for Chongming and Jinshan, the other suburbs like Fengxian, Jiading, Minhang, Pudong are also have a higher tax return.
d. Minimum tax: urban area.
Such as Jingan, Huangpu, Xuhui and other areas.
Taking the enterprise value-added tax and income tax payable of RMB 1 million as an example, the specific amount of tax returned by enterprises in different regions is as follows:
In Chongming district, enterprises with a VAT payable of 1 million RMB received a tax rebate of 70,000 RMB, and enterprises with an income tax payable of 1 million RMB received a tax rebate of more than 160,000 RMB.
In Jinshan district, enterprises with a VAT payable of 1 million RMB received a tax rebate of 70,000 RMB, and enterprises with an income tax payable of 1 million RMB received a tax rebate of 160,000 RMB.
Enterprises in Fengxian, Jiading and Minhang districts with VAT payable amount of 1 million received tax rebates of 40,000 to 60,000 RMB, and enterprises paying income tax of 1 million RMB received tax rebates of 80,000 to 140,000 RMB.
In Shanghai, enterprises with a VAT payable of 1 million yuan get a tax rebate of 20,000-40,000 RMB, while enterprises with an income tax payable of 1 million RMB get a tax rebate of 30,000-60,000 RMB.
4.Shanghai Corporate Income Tax and Individual Income Tax Return
a. Corporate income tax levy method
Audit levy: tax rate is 25%, according to the net profit.
Approved levy: including quota levy and approved taxable income rate levy:
i) quota levy:verify income tax directly
ii) assessment of taxable income rate: according to the actual amount of total income or costs, the tax shall be calculated and paid according to the pre-approved taxable income rate.
iii)taxable income rate (%) for various industries:
Agriculture, forestry, animal husbandry and fishery: 3-10%;
Manufacturing: 5-15%;
Transportation: 7-15%;
Construction industry: 8-20%;
Catering industry: 8-25%;
Entertainment: 15-30%;
Other industries: 10-30%;
Wholesale and retail trade: 4-15%.
At present, Shanghai Tax Bureau is very strict in monitoring the approved levy method of corporate income tax for limited companies. Only a few enterprises can apply for approved levy of income tax in the second year.
b. Partnership individual income tax check and ratify
Partnerships and sole proprietorships pay only value-added tax, no corporate income tax, but individual income tax and production and operation income tax. In Chongming, Jinshan and other areas registered partnership enterprises or individual proprietorship enterprises enjoy high business tax rebate policy. While you can apply for individual income tax verification collection, to achieve the full sense of the corporate comprehensive tax burden to minimum.
Taxable income rate of individual production and operation income of the partnership for various industries:
Industry, transportation, commerce: 5-20%
Construction, real estate: 7-20%
Catering service charge: 7-25%
Entertainment: 20-40%
Other industries: 10-30%
c. Preferential financial subsidies for partnership individual income tax
For enterprises with a large amount of personal income tax, Tannet can apply for financial subsidy preferential policies for them. Especially for investment management, equity investment, architectural design, urban planning, advertising and other industries. The maximum amount of financial subsidy can be given according to the proportion of enterprise income tax rebate.
5.Tax Return Preferential Policy for Shanghai Development Zone
There are many development zones and agency companies in Shanghai. In order to fulfill their tasks or attract more customers, many of them choose to cheat customers with "preferential tax policies". Based on years of experience in this field of investment and business services in Shanghai, Tannet's supplementary explanation to the tax rebate policy in Shanghai is as follows:
a. return tax base is unclear, return tax rate seems very high
Some development zones or agency companies advertise tax incentives that say "90% of the tax returned to the place".It may seem like a high percentage of tax rebates, but it’s actually very little.
The local income tax can refer to the local tax in addition to the state, also can refer to the tax left by the district and county, also can refer to the tax left by the development zone. While the tax left by the development zone of different levels is different.
Therefore, it’s quiet important to have a good understanding about the actual tax return percentage while make the choice in which district or which development zone to register companies. Generally speaking, consider the concept as "the actual rebate amount of the paid tax " would be more suitable.
b. hide tax return conditions
Some development zones or investment departments have certain requirements for enterprises' financial subsidies. For example, some development zones have requirements for paying tax. For those enterprises tax payment amount less than 100,000 RMB will not be refunded.
c. Tax return time
The tax return time of the development zone or the financial department to the enterprise will depends. The tax return frequency may via monthly, quarterly, half-yearly, even yearly.
d. Tax return party
The party/department who gives tax rebates to businesses is very important. Lots of parties could act this role, like agent company or Finance Bureau of the district.
Generally speaking, the tax is returned by district Finance Bureau or Development Zone is more standard. Tannet could help you register your company in Chongming, Jinshan development zone and promise to have the tax rebate into the company’s account by the district Finance Bureau directly.
6.Tax services provided by Shanghai Tannet for enterprises
a. Provide professional financial and tax analysis, and customize the best financial and tax plan for enterprises;
b. Provide the whole process service of company registration, and the follow-up service of company registration (tax payment, declaration and purchase of invoices) is handled in the center of Shanghai;
c. The trading company will be registered in Jinshan development zone. Six months before issuing the VAT invoice in the urban area (Shanghai stadium);
d. Service enterprises: those with high turnover are strongly recommended to register in Chongming or Jinshan development zone to enjoy high tax rebate policies;
e. Non-local enterprises or individuals registered in Shanghai, provide enterprise registration, purchase of invoices, tax declaration, billing machine hosting and other one-stop services;
f. Assist enterprises to sign preferential tax return agreements with the development zone, and apply for more preferential tax policies from the government for enterprises with large tax payments.
In addition to the above preferential tax return policies, investors or entrepreneurs in Shanghai can enjoy other preferential policies.For example, national preferential policies for key industries such as high-tech enterprises and software enterprises. Preferential financial subsidies for college graduates and other special groups. If you have any concerns, pls feel free to call our us at 021-68877368 or visit our official website www.tannet-group.com for more details. Tannet has 20 years of experience in this field of registering companies, and we’ve already helping tens of thousands of investors solve all kinds of difficult problems in Shanghai registered companies.