BEIJING: China is offering a tax break to foreign companies to try and persuade them to remain in the country after the GOP tax plan created new incentives to bring more businesses to the U.S.
The New York Times reported that China will temporarily allow foreign companies to not pay tax on their earnings. The exemption will “promote the growth of foreign investment, improve the quality of foreign investment and encourage overseas investors to continuously expand their investment in China,” China’s Finance Ministry said in a statement Thursday. However, those companies must invest those earnings from the exemption in areas being promoted by the Chinese government, like technology and mining. The exemption is retroactive to Jan. 1, 2017. The announcement comes just days after President Trump signed the new GOP tax plan into law, which includes measures like a lower corporate tax rate to attract manufacturers to the U.S.
Trump has often highlighted China as a country the U.S. needs to be more competitive with on trade.
