The Ministry of Finance, State Administration of Taxation and two other departments have co-released a tax break to attract foreign investment, Economic Information Daily reported.
Foreign investors who use the profits distributed by domestic enterprises to invest in certain projects recommended by the Chinese government will be free from income tax.
It is also required that profits distributed by Chinese companies must be dividends, bonuses or other equity investment income.
The form of investment must be direct, including capital injection, acquisition or other acceptable methods.
Also, the fund used for investment must be transferred directly to the subject company with no intermediate turnover.