The new tax to be imposed on international firms based in China goes into effect today, Xinhua News Agency reported, but analysts said the effect on foreign investors is limited. And they add that foreign companies should adapt to the new investment conditions in China and regard it as a business market rather than just a low-cost products store.
The policy states that the country will collect a city maintenance construction tax and a tax to support education from foreign companies and individuals with commercial interests in the country.
Liu Lingling, a fiscal expert and professor at the School of Economics and Management of Tsinghua University, told the Global Times that the negative effects on the growth of foreign direct investment (FDI) in China will be limited. FDI may fall a little in the following few months, but the impact will not be significant. The investment environment in China will still be competitive, tax is not the only issue for people interested in investing in China. Liu said.
She also said that the new tax policy aims to balance the market, and to provide an equal investment environment for both domestic and foreign companies.
And Liu also added that the new policy would benefit domestic private companies to some extent, as they have to deal with local employment problems.
The tariff rate of the city maintenance construction tax and tax in support of education is based on the value-added tax, consumption tax and sales tax of individual taxpayers.
If the taxpayer is based in a city the rate would be 7 percent, if the taxpayer is located in a county the tax rate will be 3 percent and 1 percent for the taxpayer based in a village.
The current rate of tax supporting education is 3 percent, according to the official website of the Nanjing Local Taxation Bureau.
Li Ling, public relations director of Wal-Mart China, told the Global Times that the new policy will not have any significant effect on their business because, as a China-based company, they comply with the country s tax policies for domestic taxpayers.
The policy states that the country will collect a city maintenance construction tax and a tax to support education from foreign companies and individuals with commercial interests in the country.
Liu Lingling, a fiscal expert and professor at the School of Economics and Management of Tsinghua University, told the Global Times that the negative effects on the growth of foreign direct investment (FDI) in China will be limited. FDI may fall a little in the following few months, but the impact will not be significant. The investment environment in China will still be competitive, tax is not the only issue for people interested in investing in China. Liu said.
She also said that the new tax policy aims to balance the market, and to provide an equal investment environment for both domestic and foreign companies.
And Liu also added that the new policy would benefit domestic private companies to some extent, as they have to deal with local employment problems.
The tariff rate of the city maintenance construction tax and tax in support of education is based on the value-added tax, consumption tax and sales tax of individual taxpayers.
If the taxpayer is based in a city the rate would be 7 percent, if the taxpayer is located in a county the tax rate will be 3 percent and 1 percent for the taxpayer based in a village.
The current rate of tax supporting education is 3 percent, according to the official website of the Nanjing Local Taxation Bureau.
Li Ling, public relations director of Wal-Mart China, told the Global Times that the new policy will not have any significant effect on their business because, as a China-based company, they comply with the country s tax policies for domestic taxpayers.
