Earnings management : corporate manipulation of tax rate changes?
China provides comprehensive tax incentive schemes for foreign funded enterprises, which includes a five-year tax concession for firms involved in manufacturing and planning to operate on the mainland for at least 10 years. These firms are exempt from enterprise income tax in the first two profit-making years and receive a 50 percent tax reduction over the next three years.
When the concession period ends, the standard 30 percent tax rate applies.
Copyright © Hong Kong Institute of Certified Accountants 2007
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Lin, K. Z. (2007). Earnings management: corporate manipulation of tax rate changes? A Plus, 3(3), 60-61.