EuroBiz magazine is the internal journal of the European Union Chamber of Commerce in China, published monthly for Chamber members by SinoMedia Ltd. Distributed to over 20,000 China-based company decision-makers.

Cover Story: Corporate Tax
As China’s tax system modernises, the burden on foreign companies is increasing. Good preparation is the key
By Dan Shupp

Since opening its economy to the world in the 1970s, the word "China" has been practically synonymous with low-cost manufacturing. Foreign investment poured in, attracted by a massive, cheap labour force and pulled toward one city or another by generous incentives, including preferential tax policies. These days, however, observers find China acting less and less like a developing country.

It is set to become the world's third-largest economy soon, and has developed globe-spanning companies to match. Priorities are now shifting. "Quality growth" was a buzzword at the National People's Congress in March, marking an emphasis on promoting industries that enhance China's technological prowess or help reduce its social and environmental problems, while the "growth at all costs" model is receding into the past.

For China's State Administration of Taxation (SAT), acting like a developed nation now means taxing like one. With the Enterprise Income Tax (EIT) Law, enacted on January 1, the authority changed its strategy to encouraging higher-tech, higher-value industry. China's new standard corporate tax rate of 25 percent is comparable to that of Austria or Sweden.

Add in the continually appreciating value of the yuan and rising CPI, and it changes the big picture for all foreign operations in China. Company managers must re-examine how their China strategy fits into their global one.

Download EuroBiz Magazine, April 2008

PDF format, 11.4MB, 100 Pages.

Party’s Over
Foreign firms face higher taxes

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The Chamber was formed with the support of the EU Delegation in Beijing on 19th October 2000. It is a non-profit membership fee-based organisation with offices in Beijing, Shanghai and Nanjing, Guangzhou, Tianjin and Chengdu.

Today, the Chamber is the leading exponent of European business interests in China creating a continuously growing business forum. It comprises of over1090 members, from global companies to small-medium enterprises. Its mission is to serve member companies by being the Voice of European Business in China.

It is built around a core of some 30 Working Groups,  which meet regularly to discuss business issues in their respective industries. The Working Groups contribute to an annual Position Paper on Business in China, which the Chamber presents to the Chinese and European governments.

The Chamber is managed by a National Executive Committee made up of representatives from various European Member States. The Supervisory Board and the Advisory Council provide strategic input for the National Executive Committee. Each Chapter is managed at the local level by a Local Board which reports directly to the National Executive Committee.

Executive Committee members, the Supervisory Board and Local Boards are elected at the Spring Annual General Meeting.

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