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BEIJING, Aug. 1 (Xinhua) -- China's State Taxation Administration (STA) has released detailed implementation rules for foreign investors claiming tax credits on reinvested dividends, providing operational guidelines for preferential tax treatment under a recently released policy.

In June, China's finance, taxation and commerce authorities unveiled a tax incentive granting foreign investors a 10 percent corporate income tax credit on direct domestic investments funded by dividends from Chinese resident companies.

The measure, effective as of Jan. 1, 2025 and running through Dec. 31, 2028 -- allows unused credits to be carried forward and applies lower rates under existing tax treaties.

According to a notice released by the STA on Thursday, profits used to pay up subscribed registered capital or increase paid-in capital or capital reserves, qualify as eligible reinvestment.

The STA notice also clarified executable frameworks for this tax incentive, including definition of the holding period for reinvestment by foreign investors, the calculation method for the determination of the tax credit amount, and procedures for foreign investors to claim tax credits.

China, notably, has been offering tax incentives to boost overseas investment. Foreign reinvestment in China benefiting from a tax deferral policy saw rapid growth in 2024, earlier data from the STA showed.