China announces its next target: multinationals’ tax schemes


After a year and a half of investigations into foreign companies using the country’s young anti-monopoly law, Chinese regulators have announced a new method of targeting multinationals.

An article and commentary piece in yesterday’sPeople’s Daily, the Communist Party’s mouthpiece, said the country must investigate multinationals who avoid China’s 25% corporate tax by shifting profits abroad. The report included a few recent examples of Chinese authorities going after multinationals for back taxes. In one, the State Administration of Taxation spent three years investigating a well-known multinational to recoup nearly 1 billion RMB ($160 million).

“China … not only provides labor, land, water and other resources, but also provides a huge market,” the newspaper wrote. “Paid so much, [multinationals] should leave a reasonable profit, to get proper tax,” it wrote, in reference to companies moving profits overseas.

The Chinese taking a closer look into corporate tax malfeasance follows a global…

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