BEIJING, March 4 (Xinhua) -- The draft corporate income tax law to be
delivered to China's upcoming parliamentary annual session will not affect
foreign companies' enthusiasm of investment in the country, a spokesman for the
session said Sunday.
"The draft law will neither cause massive influence on foreign companies or
affect their enthusiasm of investing in China," said Jiang Enzhu, spokesman for
the Fifth Session of the Tenth National People's Congress, at a press conference
one day before the opening of the session.
Major policies in utilizing foreign investment remain unchanged,Jiang said.
The draft corporate income tax law sets a unified income tax rate for
domestic and foreign companies after years of criticism that the tax policies
are unfair to domestic companies.
The draft law does not eliminate all the existing tax preferences. China
will begin to mainly offer preferences to industries, while the formerly
dominating preferences to regions will turn supplementary, Jiang said.
China will make transitional arrangements and take necessary measures
during a certain period after the law comes into effect, so as to benefit the
interests of foreign companies that are already in China, Jiang said.
The unified income tax rate will help foster a fairer, more regulated and
transparent taxation system for all kinds of businesses, and help improve the
quality and standard of China's utilization of foreign investment.
"China will be more attractive to foreign investment," Jiang said.
China currently adopts dual income-tax mechanism, under which domestic
companies pay income tax at a rate of 33 percent, while their foreign
counterparts, which benefit from tax waivers and incentives designed to
encourage investment in China, pay an average of 15 percent.