Thursday, January 3, 2013

Have they lost it now?

Restrictive tax policy will affect China’s foreign investment flows

China loves shells, especially when it is inside them! In the wake of the global slowdown, China is planning to aggressively scrutinise the tax standings of foreign registered companies operating in the Mainland. Such protectionist moves put a big question mark on the prospective future foreign investment that is going to flow into one of the fastest growing economies in the world.

The Chinese government, with the aim to adopt international standards to help boost its revenue, is planning to get all foreign-registered businesses to come under unprecedented scrutiny. This would force foreign private equity firms and hedge funds to pay inflated Chinese tax bills. The current tax policy is a follow up of China’s State Administration of Taxation ruling that a 10% dividend withholding tax would be levied on all the foreign listed companies that have their key business operations concentrated in China, which came last month.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
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