Translation. Region: Russian Federal
Source: People's Republic of China in Russian – People's Republic of China in Russian –
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Source: People's Republic of China – State Council News
BEIJING, Aug. 1 (Xinhua) — China's General Administration of Taxation (GATT) has released detailed rules for foreign investors to claim tax breaks on reinvested dividends, providing operational guidance on the preferential tax treatment under the newly unveiled policy measures.
In June this year, the Ministry of Finance, the State Tax Administration and the Ministry of Commerce of the People's Republic of China announced that they would provide foreign investors with a 10 percent corporate income tax rebate on direct domestic investment financed by dividends from profits of enterprises resident in the People's Republic of China.
The benefit, which will be in effect from January 1, 2025, to December 31, 2028, will allow unused tax credits to be carried forward to a later date and allow lower rates to be applied under applicable tax treaties.
According to a notice issued by the State Tax Service on Thursday, profits used to make additional contributions to subscribed authorized capital or to increase paid-in capital or capital reserves qualify as reinvestment.
The agency's notice also explains the scope of this tax incentive, including the definition of the time period for reinvestment, the method for calculating the tax credit amount, and the procedures for foreign investors to receive tax incentives.
Notably, China offers tax incentives to encourage overseas investment. In 2024, the preferential policy of temporarily exempting foreign investors from paying taxes on certain types of profits led to a rapid increase in foreign reinvestment in China, according to previously published data from the State Tax Inspectorate of China. -0-
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