国际商务英语谈判Chapter 8International Investment Negotiation.ppt

Each party to the cooperative joint venture is required to pay its own taxes on profits eared from the distributions of the joint venture. For the foreign party this means that net income is taxed under the Joint Venture Income Tax Law of the People’s Republic of China at progressive rates, including a local surtax. What is the taxation? What is the taxation? Net in line with the proportion of each partner’s registered capital after paying the venture’s income tax according to the country’s law on taxes and after deducting the reserve fund, bonuses for employees, welfare fund and development and rules. However, distributions are not mandatory and current profit may be retained for distribution in later years. The Chinese income tax laws contain a number of provisions setting forth the accounting rules to be followed when calculating the taxable income of joint ventures. These provisions have been supplemented by various stipulations contained in the Implement-ing Act and the Accounting Regulations of the people’s Republic of China for Joint Ventures Using Chinese and Foreign Investment. The accounting rules enunciated in these laws require that joint ventures formulate an accounting system in accordance with Chinese regulations and the circumstances of the joint venture. Once formulated, the accounting system adopted by the joint venture must be reported, for the record, to the finance department of the joint venture’s unit-in-charge and the tax bureau in the locality where the joint venture is located. How to account and distribute profit?  The terms of the equity joint venture may vary according to different circumstances, but in principle, it is between 15 to 30 years. However, for projects with large investment, long construction period and low profit ratio, the term of the joint venture may exceed 30 years. If the parties of the joint venture agree, they may, before 6 months of the expiry of the ter