1. Enterprise Income Tax: The income tax rate of foreign-invested enterprises in Xiqing District is 30%, and 24% income tax will be levied on enterprises engaged in production. In Xiqing Economic Development Zone, there is 24% and 15% respectively. The newly established foreign-invested enterprises of production, whose scheduled operation period exceeds 10 years, will enjoy income tax exemption for 2 years starting from the profit making year, and 50% income tax reduction for the 3 subsepuent years (that is to say 12%).

2. Local Income Tax: for manufacturing enterprises with foreign investment, whose scheduled operation period exceeds 10 years, the local income tax is temporarily exempted during the period while enjoying income tax exemption for 2 years and 50% income tax reduction for the 3 years. (the local income tax rate is 3%)

3. Tax Refund in Case of Reinvestment: foreign/overseas investors in enterprises with foreign/overseas investment who directly reinvest their profits gained from their enterprises to increase the registered capital or use their profits as capital investment for the establishment of other enterprises with foreign/overseas investment covering a period of operation of no less than 5 years shall receie a refund of 40% of the income tax already paid for the reinvested portion upon application to and approval by the municipal tax already. The whole amount of the income tax already paid for the reinvested portion shall be refunded in case of reinvestment in the establishment and expansion of export-oriented or technologically advanced enterprises with periods of operation of no less than 5 years upon application to and approval by the municipal tax authority.

4. Favorable Tax Terms for Export-oriented and Hi-tech Enterprises: after the exiration of the stipulated period of income tax exemption and reduction, export-oriented enterprises whose export products exceed 70% of total output in value in the current year shall pay income tax at a rate of 12%, if located in Xiqing Economic Development Zone, the income tax rate will be 10%.

For Hi-tech enterprises, the period of 50% reduction can be prolonged for another 3 years after the expiration of the stipulated period for income tax exemption and reduction. That is to say, they shall pay income tax at a rate of 12% for the prolonged 3 years.

5. Value Added Tax: the export commodities produced by a foreign-funded enterprise, except those whose exportation is restricted by China, no value added tax shall be levied.

6. Tariff: Imports of machinery, equipment, spare parts, means of transportation (excluding sedans, traveling cars, cross-country jeeps, minibuses, tool vans) and office appliances for the enterprise's own use and failing within the total amount of investment are exempt from custom duties. Imports of raw materials to be used in the manufacture of products for export are exempt from custom duties and VAT on importation.