Coroporate Tax News
- New tax law won't curb investment
Date: 5-Mar-2007 Sources: (Shenzhen Daily)
THE draft corporate income tax law to be delivered to China's upcoming parliamentary annual session will not affect foreign companies' desire to invest in the country, a spokesman for the session said yesterday.
'The draft law will neither cause massive influence on foreign companies or affect their enthusiasm of investing in China,'said Jiang Enzhu, spokesman for the Fifth Session of the Tenth National People's Congress, at a press conference one day before the opening of the session.
Major policies related to utilizing foreign investment remain unchanged, Jiang said.
The draft corporate income tax law sets a unified income tax rate for domestic and foreign companies after years of criticism that the tax policies are unfair to domestic companies.
The draft law does not eliminate all the existing tax preferences. China will begin to mainly offer preferences to industries, while the formerly dominating preferences to regions will become supplementary, Jiang said.
China will make transitional arrangements and take necessary measures during a certain period after the law comes into effect, so as to benefit the interests of foreign companies that are already in China, Jiang said.
The unified income tax rate will help foster a fairer, more regulated and transparent taxation system for all kinds of businesses, and help improve the quality and standard of China's utilization of foreign investment.
'China will be more attractive to foreign investment,'Jiang said. China currently adopts a dual income-tax mechanism, under which domestic companies pay income tax at a rate of 33 percent, while their foreign counterparts, which benefit from tax waivers and incentives designed to encourage investment in China, pay an average of 15 percent.
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