China urged to act to minimise impact of global minimum tax rules, seen as ‘first step in the Long March’

In July, 130 countries backed plans led by the Organisation for Economic Cooperation and Development to set a minimum corporate tax rate of at least 15 per cent

Liao Tizhong, former director general of the State Administration of Taxation’s International Taxation Department, has urged China to conduct research

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In July, 130 countries backed a plan led by the Organisation for Economic Cooperation and Development to set a minimum corporate tax rate of at least 15 per cent and countries where big firms operate would get the right to tax between 20 per cent to 30 per cent of profits exceeding a 10 per cent margin. Photo: Shutterstock

Published: 4:30pm, 12 Aug 2021Updated: 4:30pm, 12 Aug 2021

China should conduct targeted research and propose fiscal and taxation plans in response to new global rules to set a minimum corporate tax, according to a former taxation official.

Beijing needs to act to minimise the negative impact on the investment environment of foreign businesses in China and defend the country’s taxation rights and interests, said Liao Tizhong, former director general of the State Administration of Taxation’s International Taxation Department.

China should analyse the economic impact of the policy in advance, be prepared to amend laws, and start building technology infrastructure as early as possible, Liao wrote in an article this week in International Taxation in China, a publication under the State Taxation Administration.

In July, 130 countries backed a plan led by the Organisation for Economic Cooperation and Development to set a minimum corporate tax rate of at least 15 per cent and countries where big firms operate would get the right to tax between 20 per cent to 30 per cent of profits exceeding a 10 per cent margin.

The overhaul is aimed at curtailing tax avoidance by making global enterprises, with implementation targeted for 2023.