China: Tax credit for reinvestments by foreign investors
Tax incentive applies from January 1, 2025, to December 31, 2028
Three government agencies—the Ministry of Finance, the State Taxation Administration, and the Ministry of Commerce—in June 2025 introduced a tax credit for foreign reinvestments in eligible domestic industries. The tax incentive applies retroactively from January 1, 2025, to December 31, 2028.
The credit applies to corporate taxes on dividends, interest, and royalties, capped at 10% of reinvestment amounts, with conditions on investment type, duration, and industry compliance.
Unused credits can be carried forward, and the incentive is detailed in Announcement [2025] No. 2.
For more information, contact a KPMG tax professional in China:
Michael Wong | michael.wong@kpmg.com