State regulations provide that the income tax for enterprises with foreign investment is 30% of the taxable income, yet for those enterprises operating within the jurisdiction of Dalian municipality enjoys a favorable tax rate of 24%, and enterprises operating within those pilot zones enjoys an even more favorable rate of 15%.

Any enterprise with foreign investment of a production nature scheduled to operate for a period of not less than ten years shall, from the year beginning to make profit, be exempted from income tax in the first and second years and allowed a fifty percent reduction in the third to fifth years. These enterprises shall also be exempted from local income tax, which is 3% of the taxable income for seven years.

For those enterprises that export their products, after the above favorable treatment period expires, the rate of corporate income tax shall be 12% if 70% or more of their total product value in the year are exported, and this rate is 10% for enterprises in the Pilot Zones.

Technically advanced enterprises can enjoy three more years of favorable corporate income tax rate of 12% after the above tax benefits period expires, and for the enterprises operating in the Pilot Zones can enjoy an even more favorable rate of 10%.

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