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China Makes Life Less Taxing for Foreign Companies

Foreign companies doing business in China have complained about high taxes as well as levies for local infrastructure and required contributions for welfare programs. Above: The taxation bureau of Hongkou District in Shanghai. Photo: CFP
Foreign companies doing business in China have complained about high taxes as well as levies for local infrastructure and required contributions for welfare programs. Above: The taxation bureau of Hongkou District in Shanghai. Photo: CFP

China is offering foreign companies a tax break to encourage them to keep their earnings on the mainland, a step that follows a U.S. tax overhaul that aims to entice American firms to bring their overseas cash back home.

A 10% tax that China has slapped solely on foreign companies’ profits from equity investments will temporarily be waived if the earnings are plowed into government-targeted sectors, according to a statement issued Thursday by four central government ministries. These 348 pet sectors include mining, rail, environmental protection and elderly care.

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