The China Business Services blog says:
The long-running debate on unified taxation for domestic and foreign companies in China is expected to be officially reviewed in March, and the new tax rate could be introduced in early 2008, according to a report in Forbes, quoting a Ministry of Finance official. The rate would be 25 percent, compared to current rates of 15 percent and 33 percent for foreign and domestic companies respectively. A five-year period of adjustment is planned.
The article notes that some exceptions can be expected (as usual), and that “state-supported high-tech companies will be entitled to 15 pct income tax”. It is also noted that domestic banks will benefit from the change, and that this is likely to boost their share prices (and it would be no surprise to find that policy seeks to ensure successful market performance for these high-profile, and strategically important, institutions).
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