A director of the State Administration of Taxation confirmed that China would scrap its favourable 15 per cent income tax rate for foreign firms, but he gave no timetable for the move. Jin Renqing said the tax rate should be the same for foreign and domestic firms. Most Chinese companies pay 33 per cent income tax, while foreign companies in special economic zones and in designated industries pay 15 per cent.
However, Jin said that China would honour favourable tax policies granted to foreign enterprises that were already established, although he gave no further details.