To further stimulate the growth of foreign capital and create a higher level of open environment for foreign investors, in August 2017 the Circular of the State Council on Several Measures to Boost the Growth of Foreign Investment (Guo Fa  No.39) addressed 22 Measures, setting forth a series of objectives for formulating fiscal and tax incentives, including: extending the Corporate Income Tax (CIT) incentives for Technological Advanced Service Enterprises (TASEs) in China.
The Circular Cai Shui  n.79 has been recently released as a further step, to extend this CIT incentive nationwide effective retroactively from 1 January 2017, it will allow more high-tech and high value-added service enterprises to enjoy the preferential tax policies.
The incentive includes the following:
· Advanced technology service enterprises are subject to enterprise income tax (EIT) at a rate of 15% (the statutory rate being 25%); and
· A deduction applies to employees’ education expenditure (up to 8% of the total salary and wages), provided that certain requirements are met.
The services that are eligible for the incentive include:
· Information technology outsourcing (ITO): software development, information technology development services, information systems operation and maintenance;
· Technical business process outsourcing (BPO): business process design services, business operations management, operation services, supply chain management services; and
· Knowledge process outsourcing (KPO): research on intellectual property, research and development and testing of pharmaceutical and biotechnological products, product research and
development, industrial design, analytics and data mining, design and development of animation and online games, education development course, engineering design, etc.
Previously, the tax incentive was applicable only to certain designated cities, such as Beijing, Tianjin, Dalian, Harbin, Daqing, Shanghai, Nanjing, Suzhou, Wuxi, Hangzhou, Hefei, Nanchang, Xiamen, Jinan, Wuhan, Changsha, Guangzhou, Shenzhen, Chongqing, Chengdu and Xian.