China temporarily exempts foreign firms from taxes for reinvested profits - RTRS

China’s Finance Ministry came out with a brief statement on its website on Thursday, announcing it will temporarily exempt foreign firms from paying provisional income tax on profits they re-invest into the economy.

The reason behind this move is cited as an effort by the Chinese authorities to stop foreign firms shifting their operations out of the country. The temporary exemption on provisional income tax is retroactive from Jan. 1 this year, which means firms that have paid taxes this year will be refunded.

The statement read: The move will help “promote the growth of foreign investment, improve quality of foreign investment and encourage overseas investors to continuously expand their investment in China”.