ey-global-tax-policy-outlook-for-2015
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ey-global-tax-policy-outlook-for-2015
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China<br />
2<br />
| <strong>2015</strong> <strong>tax</strong> <strong>policy</strong> <strong>outlook</strong><br />
• <br />
2.1 K<strong>ey</strong> drivers of <strong>tax</strong> <strong>policy</strong> change<br />
China Chairman Xi Jinping announced that China will put<br />
• Tax <strong>policy</strong> is being driven by an economic shift toward<br />
<br />
promoting innovation and technology in China. The<br />
10 The<br />
State Council, in its 63rd meeting, resolved to introduce intention is to connect economic regions by way of building<br />
7 The Ministry routes to Central Asia and Europe.<br />
<br />
(SAT) jointly promoted six categories of industries:<br />
• Biopharmaceutical products<br />
2.2 Fiscal consolidation vs. stimulus<br />
• Special equipment manufacturing<br />
• Headline CIT rate<br />
• Railroad, shipping, aerospace and other transportation <br />
equipment<br />
<br />
<br />
• Computer, telecommunications and other electronic<br />
<br />
equipment<br />
<br />
• Instruments and panels<br />
• Interest deductibility<br />
• In<strong>for</strong>mation transmission, software and communications <br />
technical services<br />
<br />
<br />
• <br />
<br />
continues to support special economic zones, including the<br />
<br />
development of Qianhai (near Hong Kong), Hengqin (near<br />
Macau) and Pingtan (opposite Taiwan) areas with preferential • Hybrid mismatches<br />
<strong>tax</strong> regimes. The Shanghai Pilot Free Trade Zone (SHFTZ) is <br />
also gaining traction with the goal of building Shanghai as an <br />
<br />
<br />
<br />
• As one of the initiatives to develop Shanghai as an<br />
<br />
<br />
Hong Kong Stock Connect program on 17 November<br />
• Treatment of losses<br />
2014 to allow mutual stock market access between the <br />
Shanghai and Hong Kong Stock Exchanges. 8 To encourage <br />
participation in the scheme, China provided certain<br />
<br />
temporary <strong>tax</strong> exemptions on capital gains <strong>for</strong> certain<br />
<br />
participating investors from 17 November 2014. To ensure <br />
<br />
• Capital gains <strong>tax</strong><br />
<br />
<br />
will also be temporarily exempt from withholding <strong>tax</strong> (WHT)<br />
<br />
with respect to gains derived from the trading of shares or<br />
<br />
other equity interests in Chinese enterprises, 9 effective from<br />
<br />
17 November 2014.<br />
<br />
7 10 <br />
8 <br />
idUSKCN0IX01320141113.<br />
htm.<br />
9 <br />
The <strong>outlook</strong> <strong>for</strong> <strong>global</strong> <strong>tax</strong> <strong>policy</strong> in <strong>2015</strong> |<br />
59
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