Two Landmark Laws Adopted on Last Day of NPC

March 16, 2007 - by Will

The NPC had on March 16, 2007 adopted two landmark laws -- the Property Rights Law and the Enterprise Income Tax Law, at the closing ceremony of its annual session in the Great Hall of the People in Beijing.

With the adoption of the said Enterprise Income Tax Law, it signifies a phase-in end of superior treatments to foreign investors that had been the situation for almost 30 years since the opening up of China's economic policy in 1978. It will come into effect on January 1, 2008.

Amongst the highlights:-

Enterprise Income Tax Law (coming into effect on January 1, 2008):

(i) sets unified income tax rate for domestic and foreign companies at 25%; (note: at present, domestic companies are subject to the average corporate income tax of 25%, and FIEs are favoured with 15% average).

(ii) removal of certain tax incentives for the FIEs, such as pre-tax reduction and tax rebate for re-investment.

Property Rights Law (coming into effect on October 1, 2007):

(i) stipulates that "the property of the state, the collective, the individual and other obligees is protected by law, and no units or individuals may infringe upon it".

(ii) offers (allegedly in theory) equal protection to state and private properties in order to boost social harmony and enhancement of further economic reforms.

We are in the midst of procuring a copy of the full laws, and will seek to translate the same into English text for readers reference soonest. Watch out this space.

Meanwhile, you may click here for the breaking news.

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