Categories
Business China

China corporate tax rate reform: winner and loser

Reading Time: < 1 minute

The following screen shot is from Capital Week Jan 5, 2008

2006_7_CHN_Tax_rate

We know from Jan 1 2008 China will have a unified corp tax rate of 25% (some tax rebate for certain industry and foreign enterprises will still apply for a while).

It appears retailer, bank, home builder, and telecom (include mobile phone) will be the big winner here as they are paying a rate of 37%, 34%, 35% and 37% in 2007, respectively. From year 2008 they will enjoy the lower rate of 25%.

On the other hand, it will have little effect for Information technology, automotive, and machinery etc. as they are enjoying lower tax rate and will enjoy it for a while.