According to an article from Bloomberg News, foreign companies operating in China will see their tax incentives eliminated no later than 2006. The difference in the tax amendment will see foreign companeis paying an additional 13%. This is in accordance to the PRC's commitment to equalize the tax rates for both overseas and domestic firms when China joined the WTO in 2001. Will the growth of consumer markets in China offset the 13% tax increase to keep companies in China? If not, how hard will it be for foreign companies to dismantle their operations within the Middle Kingdom? Good question for which I have no answer.
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