China
Baker & McKenzie on the Detailed Implementing Rules of Enterprise Income Tax Law
On December 11, 2007, the State Council promulgated the long-awaited Detailed Implementing Rules of Enterprise Income Tax Law.
Attached is a client alert prepared by the China offices of Baker & McKenzie.
prc-detailed-implementing-rules-for-eit-200712.pdf
It outlines some of the key provisions of these rules that are important to foreign enterprises and foreign invested enterprises.
Date: December 30, 2007
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EY Circular on new China Corporate Income Tax Implementing Rules
With thanks to Henry Chan, Partner, Ernst & Young, Beijing.
Date: December 30, 2007
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Jinyan Li (Osgoode Hall Law School) has posted the following tax paper on SSRN:
Fundamental Enterprise Income Tax Reform in China: Motivations and Major Changes:
On 16 March 2007, the National People’s Congress of China promulgated a new Enterprise Income Tax Law (EIT Law) to take effect on 1 January 2008. It is the first law in Chinese history that imposes an income tax on all forms of enterprise. It replaces the current FIE Income Tax Law applicable to enterprises with foreign direct investment and the Interim Enterprise Income Tax Regulations (Interim EIT Regulations) applicable to Chinese-owned enterprises. Most notably, the EIT Law abolishes the tax incentives applicable only to foreign-investment enterprises (FIEs) and introduces a general tax rate that is internationally competitive. The promulgation of the EIT Law symbolizes the maturity of China’s tax policy, China’s commitment to the principles of the World Trade Organization (WTO) and China’s confidence in its economic development policy. This article provides some background on this fundamental tax reform and an overview of the key changes and their implications.
Date: December 30, 2007
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China Tax Reform
The National People’s Congress passed the new Enterprise Income Tax Law (“New EIT Law”) on March 16, 2007. The law will become effective on January 1, 2008.
This represents the most significant tax reform ever undertaken by the PRC.
It provides unified treatment for foreign-invested enterprises (“FIEs”) and domestic enterprises. It is the most important change China’s tax system has ever seen, as measured by the combination of the actual technical scale of the changes as well as the importance of China to the global market and the strategies of so many multinationals (“MNCs”).
Michael Olesnicky Head of Baker & McKenzie’s Asia Tax Practice has posted three client bulletins on the New EIT Law:
Enterprise Income Tax Law of the People’s Republic of China (Adopted at the Fifth Session of the 10th National People’s Congress on March 16, 2007)
english-translation-of-prcs-eit-law-200703.pdf
Tax Planning Strategies in Response to China’s Changing Tax Landscape: issues and structures to be considered in a post tax unification China
prc-tax-unification-tax-planning-strategies-200704.pdf
Chinese Tax Reform – Matters Requiring Urgent Attention
chinese-tax-reform-matters-requiring-urgent-attention.pdf
Posted by: Michael Olesnicky, Partner, Baker & McKenzie Hong Kong
Date: October 28, 2007
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Legal
Jianxiong, Zhai. Judicial Information of the People’s Republic of China: A Survey. October 1, 2002
http://www.llrx.com/features/chinajudicial.htm
- Chinese Law Research Resources on the Internet (Univ. of Chicago, 2002)
- Internet Guide for Chinese Studies – Law (2003)
Luo, Wei and Joan Liu. A Complete Research Guide to the Laws of the People’s Republic of China. January 15, 2003
http://www.llrx.com/features/prc.htm
Liu, Joan. Finding Chinese Law on the Internet. February, 2005 http://www.nyulawglobal.org/globalex/China.htm
- Chinese Legal Research Resources (Univ. of Chicago, 2005)
- Chinese Legal Research (Yale Law School, 2006)
- Guide to Chinese Law (Law Library of Congress, 2006)
- Internet Chinese Legal Research Center (Wei Luo, 2006)
- Research Guide to Chinese Law (NYU Law, 2006)
- Research Guide to Chinese Law (University of Washington School of Law, 2006)
- Research Guide to Chinese Law (Washburn, 2006)
- Web-Based Research Guides on PRC Legal & Business Resources (Kara Phillips, 2006)
- Tax
- Zhai Jianxiong “Tax Legislation of the People’s Republic of China and its Information Sources” Revenue Law Journal (1998) Volume 8, Issue 1, Article 10:
- viewcontent.pd
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SSRN
Topic: China Tax
Li, Jinyan, “Development and Tax Policy: Case Study of China” (September 25, 2007). CLPE Research Paper No. 27/2007 Available at SSRN: http://ssrn.com/abstract=1017301
McGee, Robert W. and Yuhua, An, “An Empirical Study of Tax Evasion Ethics in China” (September 2007). Available at SSRN: http://ssrn.com/abstract=1017413
McGee, Robert W. and Noronha, Carlos, “The Ethics of Tax Evasion: A Comparative Study of Guangzhou (Southern China) and Macau Opinion” (September 2007). Available at SSRN: http://ssrn.com/abstract=1015882
McGee, Robert W. , “Tax Evasion, Tax Misery and Ethics: Comparative Studies of Korea, Japan and China” (June 2007). Available at SSRN: http://ssrn.com/abstract=994730
Whalley, John and Wang, Li, “The Unified Enterprise Tax and SOEs in China” (April 2007). Available at SSRN: http://ssrn.com/abstract=982235
Fung, Hung-Gay Gay, Yau, Jot and Zhang, Gaiyan, “Market Impediments, Trade, and Foreign Direct Investment: Evidence from China’s Round-Tripping” (November 27, 2006). Available at SSRN: http://ssrn.com/abstract=972174
Anderson, John E., “Real Estate Taxes and Fees: Impacts on Urban Land and Housing Development in China” (October 19, 2006). Available at SSRN: http://ssrn.com/abstract=943052
Zhu, Z. and Krug, Barbara, “China’s Emerging Tax Regime: Local Tax Farming and Central Tax Bureaucracy ” (December 21, 2005). ERIM Report Series Reference No. ERS-2005-088-ORG. Available at SSRN: http://ssrn.com/abstract=902735
Berman, Daniel M. and Towne, Gerald P., “New Tax Law: Significant to U.S. Investors in Chinese Companies Owned through U.S. Holding Corporations” . BNA International Corporate Restructuring, June 2006 Available at SSRN: http://ssrn.com/abstract=918015
Tang, Tanya Y.H., “The Value Relevance of Book-Tax Differences – An Empirical Study in China’s Capital Market” (January 25, 2006). Available at SSRN: http://ssrn.com/abstract=897120
Ahmad, Ehtisham, Singh, Raju and Lockwood, Ben, “Taxation Reforms and Changes in Revenue Assignments in China” (July 2004). IMF Working Paper No. WP/04/125. Available at SSRN: http://ssrn.com/abstract=878949
Tang, Tanya Y.H., “Book-Tax Differences, a Function of Accounting-Tax Misalignment, Earnings Management and Tax Management – Empirical Evidence from China” (September 19, 2005). Available at SSRN: http://ssrn.com/abstract=872389
Chantasasawat, Busakorn Beam, Fung, K. C., Iizaka, Hitomi and Siu, Alan, “The Giant Sucking Sound: Is China Diverting Foreign Direct Investments from Other Asian Economies?” (November 30, 2004). UC Santa Cruz International Economics Working Paper No. 04-25; UC Santa Cruz Economics Working Paper No. 594. Available at SSRN: http://ssrn.com/abstract=711204
Krug, Barbara, Zhu, Ze and Hendrischke, H., “China’s emerging tax regime: Devolution, fiscal federalism, or tax farming? ” (January 3, 2005). ERIM Report Series Reference No. ERS-2004-113-ORG. Available at SSRN: http://ssrn.com/abstract=650830
Tran-Nam, Binh, “The Chinese and Australian Tax Systems: A Comparative Overview” (September 2002). Atax Discussion Paper No. 11. Available at SSRN: http://ssrn.com/abstract=623645
Guoxiang, Zeng, “An Analysis of China’s Taxation System and Its Future Development” (May 2000). Atax Discussion Paper No. 2. Available at SSRN: http://ssrn.com/abstract=623622
Gao, Shumei and Schaffer, Mark E., “Financial Discipline in the Enterprise Sector in Transition Countries: How Does China Compare?” (February 1998). CERT Discussion Paper 98/1. Available at SSRN: http://ssrn.com/abstract=67228
