In the current environment of reform, it is no surprise that China’s complex tax system is under the microscope. One of the biggest challenges is the replacement of business tax (BT) by value-added tax (VAT). The impact on large enterprises could be substantial. Incentive policies have also resulted in different tax burdens in different regions of the country, and it is now possible to use low-tax regions as a domestic “offshore” holding centres.
By Lai Jihong and Yan Juntao, Zhong Lun Law Firm