New Tax on Foreign Firms Starts as of December 1
China will begin collecting city maintenance and construction taxes and education-supporting taxes from foreign companies, and individuals with commercial interests in the country, effective on December 1, 2010.
The move will create a level playing field, in terms of taxation, for all companies operating in the country, Zhang Hanya, chairman of the Investment Association of China said on Nov. 30.
"Since China's reform and opening-up, China has provided preferential policies in order to attract foreign investment to boost growth," he said.
"Foreign-funded companies actually have enjoyed special treatment in terms of land use and taxation."
But the move has been criticized by some foreign businesses.
Zhang said this might be in part due to the mistaken belief that the taxes were created especially for foreign companies.
The government is phasing in tax increases over five years, with foreign companies paying 18-percent in 2008, 20 percent in 2009, 22 percent in 2010, 24 percent in 2011 and 25 percent from 2012, although some discrepancies may exist due to local government preferences.
"Considering the fact that some foreign firms in China make fast profits, the new taxation will not add much to their cost burden," Zhang said.
Zhang also said the introduction of the new taxes did not mean the environment to invest in China was worsening, adding taxes were not the only thing companies looked at when investing in China.
Liu Kegu, former China Development Bank vice president, said recently that China remained an attractive foreign investment destination due to its high economic growth, political stability at home, huge consumer market, and abundant labor resources.
Figures from the country's Ministry of Commerce show foreign direct investment (FDI) into China increased 7.86 percent year on year in October to $7.7 billion, rising for the 15th consecutive month.
Source: Global Times
- China to Offer New Plan for Ore Talks
- New Energy Seen as New Growth Engine
- Report: Low-carbon Energy Policy Creates Millions of New Jobs
- China's State Council to Discuss Stimulus Plan for New Energy Industry
- Chinese Vice Premier Stresses New Energy Development
- China New Energy Stimulus Plan to Focus on Support to Wind Power
- MOFCOM and New York Signed the Memorandum of Understanding on Two-Way Investment
- China new Energy Stimulus Plan to Focus on Support to Wind Power
- Experts:China's New Loan Growth May Drop in April
- Expert Analysis on 2009 New Tendency and Developing Trend for Import and Export
- GACC Announcement No.49, 2013 Adjusts Import Duty Rates on Lignite & Airplanes
- China May Raise Small-Vehicle Consumption Tax in 2011
- China Export Leading Index Up in March 2016
- China Customs Administrative Measures on Country of Origin of Import & Export Goods under China-Iceland Free Trade Agreement
- New Tax on Foreign Firms Starts as of December 1
- China MOFCOM's Ruling of Anti-Dumping Sunset Review on Chloroprene Rubber
- GACC Announcement No.10, 2015 (on Northeast Customs Clearance Integration )
- China Wants WTO to Probe EU Taxes on Screw Imports
- GACC Decree No. 204 on Pipeline-Imported Energy Supervision
- China to Grant Margin Trading Licenses in March