Oil taxation in China : implications for foreign companies

Document Type

Journal article

Source Publication

Asia-Pacific Journal of Taxation

Publication Date

Winter 1998





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China's "Open Door" policy, launched in 1979, has attracted substantial foreign direct investment (FDI). Foreign investment in the Chinese offshore oil industry represents about 4 per cent of total FDI over the period of 1979 to 1995 (Statistical Yearbook of China, 1983-96). To enhance the tax administration of the industry, in 1982 China established the Offshore Oil Tax Bureau (OOTB) to take charge of tax collection, administration, and audit of enterprises engaged in the co-operative exploitation of Chinese offshore oil resources and the provision of services for the offshore oil projects in China. This paper addresses some concerns about Chinese tax by potential foreign oil companies interested in the co-operative exploitation of China's natural resources. These concerns include the types of tax to which a foreign oil company is liable, expenses which are deductible in calculating taxable income, areas which are subject to greater scrutiny by the tax authority and possible tax planning considerations by foreign companies.

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Copyright © The Hong Kong Polytechnic University 1998

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Recommended Citation

Lin, K. Z. (1998). Oil taxation in China: Implications for foreign companies. Asia-Pacific Journal of Taxation, 2(4), 37-46.