The Dutch Ministry of Economic Affairs on Friday welcomed
China's new draft legislation unifying income tax rates for
domestic and foreign-funded companies, saying it will "hopefully
create more equal competition" in the country and make Chinese
firms "more competitive abroad."
"The Dutch Ministry of Economic Affairs hopes that China's new
draft law to close a tax gap between domestic and foreign companies
will create a level playing field in China and help increase
Chinese companies' competitiveness," the ministry told Xinhua in a
written interview.
"The new scheme will hopefully create more equal competition and
hopefully better quality products and prices for consumers," it
said.
"It will also prepare Chinese companies to be more competitive
abroad," it added.
The draft law, introduced on Thursday to China's legislature,
the National People's Congress, unifies income tax rates for
domestic and foreign firms at 25 percent, instead of the current 33
percent rate for Chinese firms and 15 percent for their foreign
counterparts.
Chinese Finance Minister Jin Renqing said Friday that the
government plans to put the new legislation into force from January
1 next year and it will be phased in over five years to cushion the
blow.
The Dutch ministry said it hopes "there will be an orderly
transition to the new tax scheme.
"Foreign companies should be informed well in advance and given
enough time in order to prepare," it said.
Commenting on the property rights law, which was also under
review by the Chinese legislature, the Dutch Ministry of Economic
Affairs said it "appreciates the draft legislation to protect
private property in China."
The new property bill grants equal protection to public and
private properties. The Chinese government hopes, among other
things, the law will help protect investments.
Trade between the Netherlands and China increased rapidly in the
past decade. The Netherlands is China's second largest trade
partner within the European Union and bilateral trade stood at
US$28.8 billion in 2005.
Dutch investment in China is also growing fast over the past few
years and it reached US$330 million in 2005.
(Xinhua News Agency March 10, 2007)
