Article　9.　The　exemption　or　reduction　of　local　income tax on　any　enterprise　with　foreign　investments　which　operates　in　an industry　or　undertakes　 a　 project encouraged by the state shall, in accordance　with　the　actual　situation,　be　at　the discretion of the people's　 government　 of　 the　 province,　　autonomous　 region　 or municipality　directly　under the Central Government. 　

Article　　10.　 Any　foreign　investor　of　an　enterprise　with foreign　 investments　　 which　　reinvests　 its　 share　 of　 profit obtained　 from　 the　enterprise　 directly　into　that　enterprise　by increasing　 its　registered　capital,　 or　 by　 making　the profit as capital　 investment　to　establish　other　enterprises　 with　 foreign investments　 to　operate　for　a　period　of not less than　five　years shall,　 upon　 approval　 by　the　tax　authorities　of　an application filed　 by　the　investor,　be　refunded forty percent of the income tax already　 paid　on　the　reinvested　amount.　Where　other　preferential provisions　 are　 provided　by the State Council, such provisions shall apply.　If　 the　 investor　 withdraws　 its　reinvestment　before　the expiration of five years, it shall repay the refunded tax. 　

Article　 11.　 Losses　incurred　by　any enterprise with foreign investments　and　 by　 an　organization　or　establishment　set　up　in China　by　a　foreign　enterprise　 to　engage in production or business operations　in　a　tax　year　may　be　 made　 up　by　the income of the following　tax　year.　Should　the income of the　following　tax year be insufficient　to　make　up for the said losses, the balance　may be made up　by　its　income　of　the　further subsequent year, and so on, over a period not exceeding five years. 　

Article　 12.　Any　enterprise　with foreign investments shall be allowed　to　deduct　from　the　amount of tax payable the foreign income tax　already　paid　abroad　 in　 respect　 of　the　income derived from sources　 outside　China　when　filing　 a　 consolidated　 income　 tax return.　 The　 deductible　amount　shall,　however,　 not　 exceed　the amount　of income tax otherwise payable under this Law in respect of the income derived from sources outside China. 　

Article　 13.　 The　payment　or　receipt　of　money　or　fees in business　 transactions　　 between an　 enterprise　 with　 foreign investments　 or,　 an organization　or　establishment　set　up in China by　a foreign enterprise to engage in production or business operations, and　its　associated　enterprises, shall　be made in the same way as the payment　or　receipt　of money or fees in business　transactions between independent　enterprises.　Where　the　payment or receipt　of　money　or fees　in　not　made　in　the　same　way as that in business transactions between　 independent　enterprises　and　results　in　a reduction of the taxable　 income,　the　tax　authorities　shall　have　the right to make reasonable adjustment. 　

Article　 14.　 Where　an　enterprise　with　foreign　investments and　 an　organization　or　establishment　set　up in China by a foreign enterprise　 to　 engage　 in　 production　or　business　operations　is established,　moves　to　a　new　site,　 merges with another enterprise, breaks　up,　winds up or makes a change in　any　of　the main entries of registration,　it　shall　present　the relevant documents　 to　 and　go through　 tax　 registration　with,　the　local　tax authorities　within thirty　days　after　the relevant event is registered with or　a　change or　cancellation　in　registration　in made by the administrative agency for industry and commerce. 　

Article　 15.　 Income　tax　on　enterprises and local income tax shall　be computed　on　an annual basis and paid in advance in quarterly installments.　Such　 payments　 shall　 be　made　within　fifteen　days from　the　end　of each quarter　and　the final settlement shall be made within　five　months　from　the　end　 of　each　tax　year.　Any　excess payment　shall　be　refunded and any deficiency shall be repaid. 　

Article　　16.　　Any　　enterprise　 with　 foreign　investments and　 any organization　or　establishment　set　up in China by a foreign enterprise　to　engage　 in　production　or　business　operations　shall file　 its　quarterly　provisional　 income　tax　return　in　respect of advance　payments　with　the local tax　authorities　within　the　period of　each advance payment of tax, and it shall　file an annual income tax return　together with the statement of final accounts within four months from the end of the tax year. 　

Article　　17.　　Any　　enterprise　 with　 foreign　investments and　 any organization　or　establishment　set　up in China by a foreign enterprise　to　engage　 in　 production　 or　business operations shall submit　a　report　on its financial　 and　 accounting　systems　to　the local　 tax　authorities　for reference.　All　accounting　records　must be　 complete　 and　accurate, with legitimate vouchers as the basis for entries. 　

If the　 procedures　for　financial　management and accounting of an enterprise　 with　　foreign　 investments　 and　 an　 organization　or establishment　set　up in China　 by　a　foreign　enterprise　to　engage in　 production　 or　 business　operations　contradict the relevant tax provisions　of　the　State　Council,　tax　payment　shall be computed in accordance with the relevant tax provisions of the State Council.