BIZCHINA> Taxation
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BIZCHINA> Taxation
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Unifed tax rate to apply to domestic, foreign-funded enterprises
(AFP)
Updated: 2007-03-02 17:49 But China is no longer in desperate need of funds. It has more than half a million foreign enterprises, received more than 60 billion dollars in investment last year, and can start paying attention to other concerns as well. For instance, China favors more investment in high technology, and the new law will reportedly provide a preferential 15 percent rate for companies in that sector. "The majority of the foreign companies are regarded as high technology and should not thus be really affected," said Shi Yaobin, a senior finance ministry official. Those that are not this lucky will have some time to get used to the new rules. Companies which currently are entitled to income tax rates of between 15 and 24 percent will have five years to adjust. "We've got similar arrangements in our own countries, but the privilege cannot last forever, and all enterprises know that," said Jorge Mora, ChinaCEOfor French firm Veolia Environment, a provider of environmental services. "We've benefited from access to these privileges, but we aren't going to stir up a big fuss because we lose this special treatment." One group of people are greeting the new rules with undivided enthusiasm -- the nation's accountants, some of whom expect their tax consulting service to rise by 30 percent. "The new tax system looks simple from outside, but actually complicates the tax business," Yang Zhiqing, a taxation professor from the Central University of Finance andEconomicstold the China Daily recently. "It's a new law, after all, and we need time to study it and put it into practice." (For more biz stories, please visit Industries)
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