Fair taxes for foreign companies

End of super-preferential policies will create a level playing field for domestic and foreign enterprises to compete

As of Dec 1, the Chinese government began to collect two taxes from overseas-funded companies and individuals with commercial interests in the country, namely the city maintenance and construction tax, and education-supporting tax. This marks the beginning of a standard tax treatment for both domestic and foreign companies.

For decades, China has reserved for overseas enterprises super-preferential tax policies. Early on in its reform and opening-up, China's domestic economic climate was more conducive to State-owned enterprises than to international enterprises. This was because the former could secure government support and thus had certain advantages in getting bank loans and financial subsidies. In a bid to attract foreign investment to help propel its economic growth, China introduced preferential tax policies for international companies.