China's Enterprise Income Tax System: Policy Objectives and Key Design Features

18 Pages Posted: 19 Dec 2014

See all articles by Antony Ting

Antony Ting

University of Sydney

Xiliang Ge

Zhejiang University of Finance and Economics (ZUFE)

Date Written: October 21, 2014

Abstract

The increasing importance of China to Australian businesses dictates the need to have a good understanding of the Chinese corporate tax system. Due to the different economic and legal environment, some provisions of the EIT Law may come as a surprise to foreign observers. This is so despite that the Chinese tax system has become more sophisticated and its government in general has strived to align its tax policies with international norms in recent years.

The aim of this paper is to identify and analyse three key policy objectives of the EIT Law – namely, neutrality, competitiveness and anti-avoidance – which provide the framework for a better understanding of the regime. These policy objectives have shaped to a large extent the EIT Law in China. This paper critically evaluates how these three policy objectives were achieved through the design of key features and provisions of the EIT Law. The analysis also serves to highlight some interesting differences with their Australian counterparts wherever appropriate.

Suggested Citation

Ting, Antony and Ge, Xiliang, China's Enterprise Income Tax System: Policy Objectives and Key Design Features (October 21, 2014). Australian Tax Forum, Vol. 29, 2014, Available at SSRN: https://ssrn.com/abstract=2539940

Antony Ting (Contact Author)

University of Sydney ( email )

Building H69 Codrington Street
Sydney, NSW 2006
Australia

Xiliang Ge

Zhejiang University of Finance and Economics (ZUFE) ( email )

Hangzhou, Zhejiang Province 310018
China

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