New China tax laws address foreign investors

Article Abstract:

China's new tax law provides a uniform tax rate imposed on all foreign business activity in the country, a further sign of China's willingness to court foreign investment. 'The Income Tax Law of the People's Republic of China Concerning Enterprises With Foreign Investment and Foreign Enterprises' took effect July, 1 1991. The law classifies taxpayers as foreign enterprises if all the capital in the company is foreign, and as a domestic enterprise if some domestic capital is involved. Preferential tax treatment is given to industry in certain locations, especially if it involves domestic capital. Tax rates for companies and individuals are discussed.

Investor relations

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Passive foreign investment companies update: proposed regs and planning

Article Abstract:

Proposed changes in the taxation of passive foreign investment companies (PFIC) could result in indirect ownership classification for investors in domestic companies who invest internationally. The proposals would expand the definition of PFIC stock dispositions and fund distributions, making a wider range of foreign investment taxable under the rules applied to qualified electing funds. The legal definitions of PFICs and the proposed rules changes are discussed.

International trade, Passive activity (Taxation)

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Business expansion of foreign investment enterprises in the People's Republic of China: some tax implications

Article Abstract:

Taxation of foreign investment income in the People's Republic of China has increased in significance along with growing multinational corporate operations. Investors should be aware of inconsistent treatment in China's tax law and procedural rules of matters such as business form and establishment of branches by new and existing businesses. Various taxes include foreign enterprise income tax, value-added tax, stamp duties, business tax, and consumption tax.

Tax Law, Public Finance Activities, International business enterprises, Multinational corporations

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