What is the implications for China
Once the world’s lowest corporate tax rate is implemented, what impact will it have on China? Cao Hongyu, a researcher at the Bank of China Research Institute, stated in his research report that China’s current corporate income tax rate is relatively high, with a general standard is 25%, which is higher than the 12.5% tax rate target under the OECD inclusive framework and higher than the 15% tax rate floor in the United States. Besides, the overseas income of Chinese companies is relatively low, and the overseas profits of companies affected by the world’s lowest corporate tax rate are not large, and the government supports companies to “go global” and is lenient in taxation of corporate overseas profits. The negative impact of introduction of a minimum world corporate tax rate system on China as a whole will therefore be relatively limited.
He Weiwen, Executive Director of the China WTO Research Association, said in an interview with the Huan Qiu Shi Bao reporter on the 6th that implementation of the global minimum corporate tax rate may weaken the enthusiasm of some Chinese network companies to register overseas for seeking tax avoidance. .
Ding Yifan, a senior researcher invited by the Globalization Think Tank (CCG), told the Huan Qiu Shi Bao reporter on the 6th that China is still the world’s most attractive investment hotspot, but China’s competitive advantage is not focused on low tax rates, rather on its complete industrial chain, perfect infrastructure and efficient administrative management. Once all countries set the global minimum tax rate, it will be the variable to be considered by more and more Chinese companies going to the international market.