For some time now there has been talk of changes to China’s corporate tax system (see “Notice Given on FDI Tax Breaks”).
Forbes now reports that the government is planning to review a draft law that would unify the rates paid by foreign-invested (currently averaging 15 percent) and local firms (currently averaging 33 percent…of reported profits!?) from the start of 2008.
I previously reported on talk of a possible unified rate being set at 24 or 25 percent, and that a 5-year transition period was anticipated for foreign companies entering before 31 December this year.
In any event, it seems that it is time to dust off the tax planning files and call in the accountants.
Should you need assistance on tax issues, please let us know. China Business Services has extensive local accounting expertise on hand to help.
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