Short-term tax exemption announced for foreign companies in China
“China said on Thursday that it would temporarily exempt foreign companies from paying tax on their earnings, a bid to keep American businesses from taking their profits out of China following Washington’s overhaul of the United States tax code,” reports (paywall) the New York Times.
- But like everything in China, there is a catch: “foreign companies must invest those earnings in sectors encouraged by China’s government — including railways, mining, technology and agriculture” in order to enjoy the exemption.
- You can find the new rules in Chinese on the website of Ministry of Finance.
In related news:
- “China’s banking regulator has issued draft measures for amending its licensing and oversight of some foreign-funded bank activities” to promote investment in the financial sector, according to Reuters.
- In November, China’s vice finance minister announced that foreign investors would be allowed to own 51 percent of Chinese securities firms, and other financial entities, and would be allowed 100 percent ownership three years from now.
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