China is considering tax breaks to attract more global funds to register in the country and reverse swelling outflows to international Low Tax Jurisdictions, people with knowledge of the matter said.
The Ministry of Finance has enlisted a global accounting firm to conduct due diligence ahead of a potential feasibility study on a capital gains tax exemption, the people said, asking not to be identified discussing confidential information. The deliberations are at a preliminary stage, and there are regulatory hurdles that would need to be cleared first.
Attracting international funds is a key part of President Xi Jinping’s push to build a more institutionally driven financial system that’s less prone to the boom-and-bust cycles that have plagued China. International funds registered in China are currently subject to taxes of up to 25 percent on capital gains earned worldwide, marring the nation’s appeal as a base.
Courtesy of bloomberg.com