1. Where a foreign-invested enterprise reinvests its accumulation fund (or development, reserve fund) and increase the registered capital of the enterprise accordingly, the tax rebate for reinvestment shall apply to the foreign investor's share in the above reinvestment.

2. The provision of Article 80.1 of the Implementation Rules of the Income Taxation Law on Foreign-invested Enterprise regarding direct reinvestment in other enterprise with foreign investment shall include: (1) in case of reinvesting and establishing a new foreign-invested enterprise, the reinvested amount shall constitute the registered capital of the new enterprise; (2) reinvestment in other existing company (including purchasing of other existing company's shares) shall result in the increase of the registered capital of the existing foreign-invested enterprise.

3. Where a foreign investor reinvests the after-tax profit of a foreign-invested enterprise of a calendar year once or time after time, the total reinvested amount for the purpose of the calculation of tax rebate shall not exceed a limit calculated according to the foreign investor's shares and a particular formula.

4. Wholly foreign-owned enterprises that only engage in investment business and enjoy tax rebate shall include enterprises that specially engage in investment and certain relevant businesses.

----Rose He