On 30 August 2018, the Standing Committee of the State Council proposed a three-year exemption from Corporate Income Tax (CIT) and Value Added Tax (VAT) on interest income derived by overseas investors from their investment in China's bond markets. This brings good news to foreign institutional investors – reducing their tax burdens and clarifying their uncertain tax positions. However, we are still waiting for clarity on some issues and expect these to be addressed when the Ministry of Finance and State Administration of Taxation issue detailed regulations.
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