Saving money: How multinationals can benefit from China's tax treaties
October 27, 2015 | BY
Katherine JoChina has double tax agreements with more than 100 countries that MNCs can use to reduce – or even eliminate altogether – local withholding and enterprise income taxes. Here is how MNCs can qualify and cut costs
Since China negotiated its first bilateral tax treaty in 1981, it has concluded treaties with numerous countries for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and/or capital.
As of September 25 2015, China is a party to double tax agreements (DTAs) with 103 jurisdictions. An updated list of tax treaties that China has signed may be found on the State Administration of Taxation (SAT) website. Under these treaties, residents of foreign countries are taxed at a reduced rate or are exempt from PRC income taxes on certain items of income they receive from sources within the country. These reduced rates and exemptions vary.
Enterprise income tax in China
Pursuant to the PRC Enterprise Income Tax Law (中华人民共和国企业所得税法) (EIT Law) and its Implementing Rules, EIT taxpayers are divided into two categories: resident and non-resident enterprises.
Resident enterprises
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