Open AccessEliminating Privileges Enjoyed by Foreign Investors in China: Rationality and Ramifications Under a Unified Tax Code
Author(s) -
Xiaoyang Zhang
Publication year - 2007
Publication title -
deakin law review
Language(s) - English
Resource type - Journals
eISSN - 1835-9264
pISSN - 1321-3660
DOI - 10.21153/dlr2007vol12no2art221
Subject(s) - tax law , china , rationality , foreign direct investment , investment (military) , order (exchange) , business , economics , ad valorem tax , income tax , law and economics , tax avoidance , international taxation , double taxation , tax reform , market economy , finance , law , macroeconomics , political science , politics
The enterprise income tax law in China has for a long time been characterized by the co-existence of two tax codes applied to foreign investment enterprises and indigenous enterprises respectively. Tax privileges granted to foreign investors give rise to the inequality of tax treatment among enterprises in the country. Under the newly released Enterprise Income Tax Law, a unified tax code is to be applied to all enterprises alike, and tax impetus is no longer reserved for foreign investors. This is a move towards developing a platform on which all enterprises in China can compete equally in terms of taxation. A way forward is contemplated over integrating current laws on foreign investment enterprises into the general domain of the commercial law regime, in order that those mutually exclusive legal regulations presently applied to foreign investment enterprises and their local counterparts can eventually be unified in the same way as in the field of taxation.