Shanghai Optimizes CIT Preference Eligibility Accreditation for Key Industries in Lingang New Area

Three departments, including the Shanghai Municipal Finance Bureau, have jointly issued the revised Administrative Measures for Accreditation and Recognition of Preferential Corporate Income Tax for Key Industries in the Lingang New Area of the China (Shanghai) Pilot Free Trade Zone (PFTZ) (the “Administrative Measures”), with effect from January 1, 2025.

The Notice on Corporate Income Tax Policies for Key Industries in Lingang New Area of the China (Shanghai) Pilot Free Trade Zone (Cai Shui [2020] No. 38) specifies the policy of reducing CIT at a rate of 15% for five years from the date of establishment for enterprises in key industries in the Lingang New Area in the key areas of integrated circuit, artificial intelligence, biomedicine, civil aviation etc.

The revised Administrative Measures for Accreditation optimize the basic conditions that enterprises need to meet continuously in order to enjoy the tax incentives. Generally, the five conditions remain unchanged, among which item (a) has been optimized from “registered in the new area since January 1, 2020 and within less than 5 years (excluding enterprises moving into the new area from other regions)” to “registered in the new area for less than 5 years (excluding enterprises moving into the new area from other regions)”.