China pledged to cut taxes on the profits that foreign companies take out of the country by 50% in a bid to encourage more overseas investment, Financial Times reported. Lower tax rates will also apply to dividends paid by Chinese listed companies to foreign shareholders through the Qualified Foreign Institutional Investor program. Both conditions will apply only for companies and shareholders based in jurisdictions with double taxation agreements with China, such as the UK. Foreign companies may initially repatriate more profits, but in the longer term the new rules should provide new incentives for investment, consultancy KPMG said. China collected US$8.6 billion of withholding taxes last year, accounting for more than half of the total corporate taxes paid in China by foreign companies, according to data from KPMG.