Tax

Hong Kong and foreign companies making frequent visits to mainland China are likely to be subject to PRC enterprise income tax, while foreign investors, lenders and technology licensors will face challenges in seeking the most preferential rates of PRC withholding tax.

The new Enterprise Income Tax Law will take effect on January 2008. What changes should be expected by foreign investors?

Industrial land is subject to a new set of regulations in terms of granting procedures, granting prices, urban land use tax and requirements governing the conditions of using industrial land.

Tax issues clarified in the restructuring of foreign-invested banks.

Enterprise income tax rate for both FIEs and domestic companies set at 25%.

FIEs with one single production function under tax investigation.

This law aims to unify tax treatment among foreign invested enterprises and domestic enterprises through a unified tax rate and corporate income tax system.

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By Winston Zhao and Liming [email protected]; [email protected] new PRC Enterprise Income Tax Law (中华人民共和国企业所得税法)was…