Surtaxes signal end of preferential tax policies for foreign investors
October 28, 2010 | BY
Candice MakConcentrate on tax policy transparency and consistent enforcement
The tax gap is now closed up between domestic and foreign investors.
On October 22 2010, the State Council issued a notice that repealed the tax exemption of two surtaxes on foreign-invested companies. Beginning December 1 2010, they will have to pay the urban maintenance and construction tax (UMCT) and the extra charges of education funds tax (EFT).
The repeal represents the elimination of the final major tax policy that offered preferential treatment to foreign-invested enterprises, foreign companies and foreign individuals. Peng Tao, a New York-based tax specialist and of counsel at DLA Piper says this tax exemption repeal is more symbolic rather than a substantial added burden to foreign investors.
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