Mon, Mar 12, 2018 - Page 16 News List

Incentives do not make China more competitive: MOF

GREENER GRASS?While measures announced by Beijing promise ‘national’ treatment, local tax laws in China are not especially attractive, officials said

Staff writer, with CNA

The Ministry of Finance (MOF) underscored how Taiwan’s tax policies for businesses and professionals are more competitive than China’s, even after Beijing announced 31 measures designed to attract Taiwanese companies and individuals to the country.

Taiwan grants businesses multiple tax benefits, including a tax break for angel investors of up to NT$3 million (US$102,389) under last year’s amendments to the Statute for Industrial Innovation (產業創新條例), the ministry said.

Meanwhile, China’s incentives do nothing more than subject Taiwanese firms and individuals to the same tax policies that govern Chinese domestic enterprises and talent, the ministry said.

Comparing major taxes in the two countries, the ministry has found that Taiwan’s effective tax rate for corporations is 13 to 14 percent across all sectors, whereas China’s is 15 percent for firms in the high-earning technology industry, it said.

Furthermore, the highest personal income tax rate is 40 percent in Taiwan and 45 percent in China, it said.

Some of China’s new tax schemes are actually copied from Taiwan, the ministry said, giving as an example a policy of granting development and innovation centers a full refund on their taxes for purchased equipment.

Tax policies are only one of the factors affecting corporate investments and talent flows, the ministry said.

Other factors, such as regulations on the flow of capital, would play an equally important role in determining how Taiwanese choose to respond to China’s incentive package, it said.

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