China offers tax breaks to counter US tax cuts
PUBLISHED: December 28, 2017 at 9:25 pm | UPDATED: December 28, 2017 at 9:25 pm
By Joe McDonald | Associated Press

BEIJING — China is responding to Washington’s tax overhaul by offering foreign companies a break on Chinese taxes in a bid to retain investment.

The measure announced late Thursday is Beijing’s first major reaction to the U.S. decision to cut corporate tax rates. It follows a flurry of promises by communist leaders to spur growth in the slowing, state-dominated economy by opening more industries wider to foreign companies.

Foreign companies will be exempt from withholding taxes on profits they re-invest in industries specified by Beijing, the Finance Ministry and tax agency announced. It is retroactive to Jan. 1, 2017, meaning companies would receive a refund on taxes paid this year.

Beijing wants to “attract foreign investors after a host of countries unveiled similar measures to lure foreign and domestic investment,” the official Xinhua News Agency said.

The exemption will apply to companies that re-invest profits in industries cited in government investment catalogues, the announcement said. Those include solar and wind power, “green farming” and other fledgling fields in which Beijing is trying to develop technology.

Supporters of the U.S. changes enacted this month say it will encourage investment in the United States. Governments including Canada and private sector analysts have warned that could draw money away from their economies.

It was unclear whether China’s tax break was significant enough to influence investment decisions in emerging industries in which foreign companies complain they are shut out of promising areas or face pressure to hand over technology to potential Chinese competitors.

China has long been among the top global destinations for investment but foreign enthusiasm is cooling. Surveys by business groups show companies are shifting emphasis to other Asian economies seen as more profitable or less restrictive.

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https://www.mercurynews.com/2017/12/28/c...er-us-tax-cuts/

China Offers Tax Incentives to Persuade U.S. Companies to Stay
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By SUI-LEE WEE
DEC. 28, 2017


BEIJING — China said on Thursday that it would temporarily exempt foreign companies from paying tax on their earnings, a bid to keep American businesses from taking their profits out of China following Washington’s overhaul of the United States tax code.

There is, however, a catch: To be eligible, foreign companies must invest those earnings in sectors encouraged by China’s government — including railways, mining, technology and agriculture — according to a statement from the Finance Ministry. The measure is retroactive from Jan. 1 this year, the ministry said.

The move would “promote the growth of foreign investment, improve the quality of foreign investment and encourage overseas investors to continuously expand their investment in China,” the ministry said. It did not elaborate.

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https://www.nytimes.com/2017/12/28/busin...bill-china.html