New corporate tax law in the works
22 December 2006
The Standing Committee of the National's People's Congress will start deliberating legislation to unify tax rates for foreign and domestic companies, the South China Morning Post reported, quoting the 21st Century Business Herald. The law would raise the tax rate for foreign companies and reduce them for domestic ones. Foreign firms that set up in development zones currently pay corporate income taxes of about 15% and 24% if they set up in other areas. Domestic companies pay about 33%, although those with lower profits can have their rates reduced to 27% or even 18%. The standing committee's next meeting starts this Sunday and it could begin deliberating the bill then. Second reading could be done in February, in time to present it to the full congress in March.
