The dual corporate income tax in China: the impact of unification
AbstractFor many years, foreign funded companies in China enjoyed a relatively low tax rate and a series of preferential policies which were aimed at encouraging foreign direct investment in China. By adopting a new law in 2007, however, the National People's Congress proclaimed the end of the dual corporate-income-tax system. From 2008, the preferential tax treatment of foreign capital will be phased out. As a result, the income tax rate for domestic and foreign funded companies will be unified at the rate of 25%. This paper explores the impact of the dual corporate income tax system on both domestic and foreign funded enterprises and discusses the possible effects of the unification.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 11547.
Date of creation: May 2008
Date of revision: Aug 2008
Publication status: Published in Public Finance and Management 4.8(2008): pp. 655-677
dual corporate income tax; China; unification; foreign funded enterprises;
Find related papers by JEL classification:
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-18 (All new papers)
- NEP-CNA-2008-11-18 (China)
- NEP-PBE-2008-11-18 (Public Economics)
- NEP-PUB-2008-11-18 (Public Finance)
- NEP-TRA-2008-11-18 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John Whalley & Li Wang, 2007. "The Unified Enterprise Tax and SOEs in China," NBER Working Papers 12899, National Bureau of Economic Research, Inc.
- Ji, Jingjing & Ye, Zhiqiang & Zhang, Shunming, 2013. "Welfare analysis on optimal enterprise tax rate in China," Economic Modelling, Elsevier, vol. 33(C), pages 149-158.
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