The dual corporate income tax in China: the impact of unification

M van der Hoek, Shuhong Kong and Zhenzi Li

MPRA Paper from University Library of Munich, Germany

Abstract: For 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.

Keywords: dual corporate income tax; China; unification; foreign funded enterprises (search for similar items in EconPapers)
JEL-codes: H25 (search for similar items in EconPapers)
Date: 2008-05, Revised 2008-08
New Economics Papers: this item is included in nep-cna, nep-pbe, nep-pub and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Public Finance and Management 4.8(2008): pp. 655-677

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:11547

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