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ARTICLE · 04 JULY 2015

Circular on local incentives released by PRC State Council

R&P China Lawyers
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The Circular specifically prohibits local incentives for new investment and cancels previously-confirmed incentives.

ChinaGovernment, Public Sector
Robin Tabbers
Robin Tabbers
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Introduction of Circular

In the past few years, local governments have actively introduced more and more incentives to attract foreign investors to their locality. Incentive-shopping by foreign investors has become a popular practice, and one result has been that local governments have seen their local part of the tax revenues from a lot of local business decrease significantly.

On 27 November 2014, the PRC State Council released new policies that are designed to curb such practices. Guofa [2014] No. 62 ('Circular') launches a comprehensive reform of various taxes and other preferential policies, specifically prohibiting local incentives for new investment and ordering the cancellation of previously-confirmed incentives.

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