There are significant differences in tax preferential policies between domestic and foreign-invested enterprises: the preferential tax rate for domestic enterprises has a small range, with two levels of 18% and 27%; while the preferential range for foreign-invested enterprises is larger, at two levels of 15% and 24%. The scope of application of preferential policies for domestic enterprises is relatively narrow, mainly including the tertiary industry, enterprises utilizing "three wastes", labor service enterprises, school-run factories, welfare enterprises, etc. In contrast, the scope of application for foreign-invested enterprises is wider, mainly including production enterprises, advanced technology enterprises, product export enterprises, as well as enterprises engaged in energy, transportation, port construction, etc. The duration of tax reduction and exemption preferential policies for domestic enterprises is shorter, generally 1-3 years, whereas the duration of tax reduction and exemption preferential policies for foreign-invested enterprises is longer, usually 5 years or more. Specific preferential policy provisions are as follows:
1. Enterprises located in high-tech industrial development zones approved by the State Council, which are recognized as high-tech enterprises, may be subject to a reduced tax rate of 15%, and newly established enterprises will be exempt from taxes for two years starting from the year of production.
2. Income generated from services for agricultural production in rural areas, technical service income of scientific research institutions and colleges, will be temporarily exempted.
3. Newly established independently accounted...