Legislation roundup: FDI, outbound investment, and environmental protection tax
January 12, 2018 | BY
Katherine Jo &Income tax burdens have been eased for foreign investors, tax credit policy has been revised to align with outbound investment needs, and the calculation method for environmental tax has been clarified
FDI
Ministry of Finance, State Administration of Taxation, National Development and Reform Commission and Ministry of Commerce, Circular on Policy Issues Concerning Provisionally Not Levying Withholding Income Tax on Direct Investments by Foreign Investors Made Using Distributed Profits
The deferred tax policy shall apply to the direct investment by a foreign investor of profit distributed to it by a tax-resident enterprise in China in an investment project in the encouraged category, provided that the specified conditions are satisfied, and withholding income tax shall provisionally not be levied thereon.
Further reading
Outbound
Ministry of Finance and State Administration of Taxation, Circular on Issues Relevant to Improving the Enterprise Foreign Income Tax Credit Policy
With respect to dividend income sourced from abroad, when an enterprise calculates the deductible income tax amount and tax credit limit relating to such foreign dividend income in accordance with provisions, the foreign enterprises in which it directly or indirectly holds at least 20% of the shares shall be limited to the five layers of foreign enterprises determined in accordance with the shareholding methods specified in Article 6 of document Cai Shui [2009] No.125.
Further reading
Environmental Protection
State Council, Implementing Regulations for the PRC Environmental Protection Tax Law
The tax base for taxable solid waste shall be determined based on the quantity of solid waste discharged. The quantity of solid waste discharged shall be the balance derived from subtracting the quantity of taxable solid waste stored, disposed of and recycled during the period in question from the quantity of taxable solid waste generated during the period in question.
Further reading
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