2) For the foreign-invested productive enterprise in the NHZ, with its production and operation period of more than 10 years, the enterprise can be exempted from the enterprise income tax in the first two years starting from the profit-making year, and its income tax can be reduced by 50% from the third to fifth year, and it can be exempted from the local income tax during the period of enjoining the above-mentioned preferential policies.

3) The foreign-invested enterprise, which has conformed to the following conditions and been approved by the taxation organ, can be taxed at a reduced rate of 15% for the enterprise income tax, and be exempted from the local income tax:

a. the projects with the investment of more than 30 million USD and a long time for reimbursement;

b. the projects of the power, traffic and harbor constructions.

4) After the period of the enterprise income tax exemption or reduction expires according to the taxation laws and regulations, the foreign-invested product-exported enterprise, with its current year's export value of the products amounting to more than 70% of its current year's output value of the products, can be taxed at a reduced rate of 50% for the enterprise income tax according to the tax rates stipulated by the taxation laws. But, the product-exported enterprises, which have paid the enterprise income tax at a tax rate of 15% and conformed to the above-mentioned conditions, can be taxed at a rate of 10 % for the enterprise income tax. After the period of the enterprise income tax exemption or reduction expires according to the taxation laws and regulations, the foreign-invested product-exported enterprise, with its current year's export value of the products amounting to more than 50% of its current year's output value of the products, can be exempted from the local income tax.

5) The foreign-invested enterprises with the advanced technologies, which are still acknowledged as those with the advanced technologies after the period of the enterprise income tax exemption or reduction expires according to the taxation laws and regulations, can be taxed, with 3-years extension, at a reduced rate of 50% for the enterprise income tax according to the tax rates stipulated by the taxation laws, and can also be exempted from the local income tax.

6) The foreign-invested enterprise, with its actual operation period of less than 10 years, should pay its reduced and exempted enterprise income tax and local income tax.

(2) Circulating Tax

1)The goods imported for manufacturing the export-oriented products can be exempted from the value-added tax.

2) The income obtained by the research units from its technology transfer, can be exempted from the business tax, in order to encourage the introduction and extension of the technologies.

3) The units or individuals, being engaged with the business of the technology transfer, can be exempted from the business tax.

4) The feeds produced and sold by the feeds industrial enterprises, which have met the requirements of the regulations, can be exempted from the value-added tax.

5) The products, of which a part of resources can be comprehensively used , and which have met the requirements of the regulations, can be exempted from the value-added tax.

6) In order to encourage the exportation, the value-added tax levied on the export goods and having been paid by the productive enterprises, which export their self-produced products by themselves or through their appointed agents, can be refunded. As for the foreign-invested enterprises which were approved and set up before the 31st of December, 1993, the goods exported by themselves or through their appointed agents can be exempted from the value-added tax, but the tax amount of the income from the exported goods can not be offset or refunded, and should be reckoned in the product costs.

7) As for the foreign-invested projects, which conform to Categories of the Encouraged Projects and the Restricted Projects Class B listed in << Industrial Catalog Guiding Foreign Investment>>, and of which the technologies have been transferred, the equipment imported by an enterprise for self-use and at the cost less than the total investment value, can be exempted from the customs duty and the value-added tax of the import segment, except the commodities listed in<<Catalog Of The Import Commodities Unallowable To Be Exempted From Taxation For The Foreign-Invested Projects>>.

8) As for the projects of using the loans from the foreign governments and from the international financial organizations, the equipment imported by an enterprise for self-use and the imported equipment provided, with no commercial value, by a foreign businessman for processing trades, can refer to the Item 7), i.e., can be exempted from the customs duty and the value-added tax of the import segment, except the commodities listed in<<Catalog Of The Import Commodities Unallowable To Be Exempted From Taxation For The Foreign-Invested Projects>>.

9) As for the Chinese-invested projects, which conform to << Catalog of the Major Industries, Products, and Technologies Currently Encouraged to be Developed By the State>>, the equipment imported by an enterprise for self-use and at the cost less than the total investment value, can be exempted from the customs duty and the value-added tax of the import segment, except the commodities listed in<<Catalog Of The Import Commodities Unallowable To Be Exempted From Taxation For The Chinese-Invested Projects>>.

10) As for the projects, which conform to the regulations listed in Items 7), 8), and 9), the technologies, necessary accessories and spare parts imported with the equipment in accordance with the contracts of the projects, can also be exempted from the customs duty and the value-added tax of the import segment.

(3) The State-stipulated preferential policies, which have not been covered at the above, are similarly applicable to the enterprises in the NHZ. If there occur some changes in the State policies, the new policies will be taken as the standard.

(4) Nanjing Municipal State-Taxation Bureau, Gaoxin Branch and Nanjing Municipal Local-Taxation Bureau, Gaoxin Branch are responsible for the explanation of the above-mentioned policies.