On July 28, 2017, Prime Minister Li Keqiang presided over the meeting of the State Council’s Standing Committee, announcing several polices aimed at attracting foreign investment and creating an international legal and busines s environment:
A deferral tax policy for profit distribution from resident companies to their overseas shareholders when profits are directly reinvested in encouraged investment projects in China. This policy will not reduce the tax liability in China, but will increase the efficient use of capital for foreign investors wishing to expand their investment in China.
A nationwide expansion of the preferential enterprise income tax (“EIT”) policies for qualified advanced technology service enterprises. Currently, the preferential EIT policies include
a) a reduced 15% EIT rate; and
b) deduction of employee training expenses that do not exceed 8% of total employee salary expenses (compared to the 2.5% general deduction) and carry forward of the excess.
The new policies are expected to be implemented by the end of September this year.