Document Type



International Law | Tax Law


In the summer of 1979, a month-long seminar on taxation sponsored by Harvard Law School’s International Tax Program took place in the People’s Republic of China. Due to limited foreign investment, China was not required to consider the applicability of its domestic tax laws to foreigners. The expected increase in foreign investment after the passage of the 1979 Joint Venture Law will require changes to the existing tax structure. Currently, nine taxes exist in China. While an increase in foreign investment will lead to new taxes, some of the existing taxes may apply to foreigners.

This article examines the income tax and the consolidated industrial and commercial tax, which are most relevant to foreigners. Part I examines the industrial and commercial income tax. This section describes this tax’s taxpayers and taxable activities, tax base, tax rates, payment and collection procedures, violations and penalties, and implications for foreign businesses. Section II explains the consolidated industrial and commercial tax, and describes various aspects of the tax and its implications for foreign businesses. Part III concludes by speculating that the United States may enter into an OECD-type treaty with China if it adopts a modern corporate income tax similar to the corporate income tax systems of socialist countries in Eastern Europe.