The Unification Of Tax System In China's Foreign-Funded Enterprises

To establish fair competition

The tax rate is relatively low.

The head of the Ministry of Finance and the State Administration of Taxation introduced that in October 18th, the State Council issued the "State Council notice on the unification of urban maintenance and construction tax and education surcharge system for domestic and foreign enterprises and individuals", and decided to levy urban maintenance and construction tax and educational surcharge on foreign invested enterprises, foreign enterprises and foreign individuals (hereinafter referred to as foreign-funded enterprises).

This is another important measure for China to unify the tax system of domestic and foreign enterprises, and it also means the comprehensive unification of the tax system of our foreign-funded enterprises at home.

The Ministry of Finance introduced the value added tax and consumption tax in our current tax system.

In order to raise funds for urban and rural construction and expand the sources of local education funds, the State Council promulgated the Provisional Regulations on urban maintenance and construction tax in People's Republic of China in 1985 and 1986, and the Interim Provisions on the collection of educational fees.

The tax on urban maintenance and construction and the additional education fee are based on the actual amount of tax paid by value-added tax, consumption tax and business tax (before 1994, for product tax, value-added tax and business tax).

The urban maintenance and construction tax is collected according to the location of the taxpayer as the urban area, the county seat (town) and other regions, at the rate of 7%, 5% and 1% respectively, and the education fee is currently collected at a rate of 3%.

The responsible person said that the urban maintenance and construction tax and education fees have been levied for more than 20 years, only for Chinese citizens and domestic enterprises.

Such internal and external tax and fee systems played an important role in attracting foreign investment and introducing advanced foreign technologies in the early days of reform and opening up.

With the deepening of China's reform and opening up, such a tax system is increasingly inconsistent with the requirements of fair competition in the market economy.

A unified tax system for all kinds of enterprises is a necessary requirement for fair tax burden and fair competition.

With the continuous improvement of China's economic and social development and market economic system, it is ripe to unify the urban maintenance and construction tax and education surcharge system of domestic and foreign capital enterprises.

Liu Shangxi, deputy director of the Finance Department of the Ministry of finance, said that the unification of urban construction tax and education surcharge for domestic and foreign enterprises was carried out under the premise of achieving the unification of several other major taxes. The two tax rates involved were relatively low, which had little impact on the tax burden level of foreign-funded enterprises, and foreign-funded enterprises had the ability to bear.

The responsible person said that the collection of urban maintenance and construction tax and education surcharge on foreign-funded enterprises will not have a negative impact on attracting foreign investment in China.

The purpose of levying urban maintenance and construction tax and education surcharge for foreign-funded enterprises is not to increase the burden of foreign-funded enterprises, but to establish a tax mechanism and investment environment conducive to fair competition. I believe this measure will get the understanding and support of foreign-funded enterprises.