In Domestic And Foreign Enterprise Income Tax Unified Study On Fdi

《PRC enterprise income tax law》has passed in the March 16, 2007 by the Tenth National People's Congress at its fifth meeting, implemented in the January 1, 2008. This is a major milestone reformation in China's taxation system, aiming at harmonize the different types of enterprises income tax system. In accordance with international common practices, new enterprise income tax law fully embodies the principle of "four aspects of unification": domestic enterprises and foreign enterprises applying unified enterprise income tax law; appropriately reducing the corporate income tax rate of domestic enterprises, foreign enterprises of a unified 25 % of the enterprise income tax rate; unifying and standardizing the tax deduction; unifying tax preferential policies, establishing an "industrial-based, supplemented by regional concessions" in the new system of tax concessions. The new enterprise income tax law shows that the tax system in China improves day after day. It is also an important sign that China's socialist market economy development has improved steadily, the state financial affordability rised. The implementation of the new tax laws will have a profound impact on China's economy and society. This paper predicts and analyzes the implementation on FDI's size, quality, and structure effect after the new corporate income tax law put into practice, and makes specific recommendations on how to improve the quality of the FDI, closely linking the policy change in new enterprise income tax law, considering the tax factor to FDI(Foreign Direct Investment) and the FDI status quo in Shandong Province,Firstly, this paper analyses from the three aspects of the reunification of domestic and foreign enterprises income tax effects the overall FDI theoretical. Secondly, specifically predicts the foreign unified corporate income tax' impaction on FDI , using Shandong Province 2006 foreign investment relevant economic data. Finally, we conclude that a unified income tax for domestic and foreign enterprises have limited impact on the scale of FDI, but plays a positive role in the optimization of the FDI's structure and improving the quality of foreign direct investment. We put forward our advice on how to raise the level of quality of FDI from attracting investment, accelerating industrial adjustment, promoting coordinated regional development.