Two-Tier Corporate Tax Regime To Be Phased Out In China

21 November 2002 Speaking to the Hong Kong Standard at the sidelines of the 16th World Congress of Accountants on Tuesday, China's Finance Minister, Xiang Huaicheng announced that the mainland's two-tier corporate income tax system for foreign-invested and domestic firms will be unified, although he admitted that he did not know exactly when this would be taking place.

'We don't have a concrete timetable because amendments to the law require us to consult public opinion. But we'll definitely do it,' he told the newspaper.

Prior to China's World Trade Organisation (WTO) entry, foreign-invested enterprises located on the Chinese mainland had enjoyed tax advantages for many years. Now, however, Beijing is planning to introduce a system whereby certain industries receive preferential tax treatment, regardless of company ownership.