NEW TAX LAW EXPECTED IN MARCH
January 31, 2007 | BY
clpstaff &clp articles &Chinese tax officials say that they will submit their unified draft tax legislation to parliament in March 2007. The revisions were reviewed by lawmakers…
Chinese tax officials say that they will submit their unified draft tax legislation to parliament in March 2007. The revisions were reviewed by lawmakers in December 2006, according to official sources.
While some foreign companies have complained of a lack of transparency in drafting the new legislation, tax officials say that they have consulted a wide range of views. "We have extensively solicited opinions and advice especially the opinions of foreign businesses in China," says Wang Li, the deputy director of the State Administration of Taxation.
Foreign companies are currently subject to a lower tax rate than Chinese firms, which generally pay a 33% income tax rate. The draft law proposes that these rates be unified at about a 25% rate. Wang says that the different rates have encouraged domestic companies to pose as foreign-invested enterprises in order to pay lower tax rates.
The administration is also preparing a new corporate income tax law, although it has not said precisely when the law will take effect. China is now moving into the third phase of its 'golden tax' project, which aims to make tax data available online and to link tax databases.
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