The Adjustment Of Tax Policy About Foreign Inestment Of Sri Lanka And Its Impact On Investment Of Chinese Enterprises

Among South Asian countries,Sri Lanka is superior and more open in geographical position and economic environment.In terms of location selection,it is very attractive to “going out” for overseas investment for Chinese enterprises.However,opportunities and risks are both in the process of foreign investment.To avoid the foreign investment’s risks effectively,it is necessary prerequisite for thorough understanding of Sri Lanka’s overall investment environment.And tax environment is an indispensable part of investment environment.The advantages and disadvantages of the taxation environment for investment coexist in Sri Lanka.The government promotes duty-free facilitation and foreign exchange control exemption.There are also various preferential tax policies for industries,scale,projects and regions.But at the same time,there are some disadvantages such as the diversification of tax system,the more variety of tax items,the non-ideal actual implementation of investment preferential policies,etc.,and the tax exemption and investment preference are accompanied by certain requirements.In view of the problems of tax policy in Sri Lanka,for the Chinese “going out” companies to explore the Sri Lankan market,it is necessary to fully investigate and understand the taxation environment and recognize the importance of international tax planning in Sri Lanka.In general,Sri Lanka’s tax burden is relatively heavy,but due to its low level of economic development and low GDP,it leads to a low tax burden rate.The effective use of preferential tax policy can help enterprises reduce the actual tax rate in Sri Lanka.This paper aims to make the effective suggestions on Chinese "going out" enterprises and to enhance the adaptability and competitiveness of enterprises in Sri Lanka.This article will first detail the investment environment in Sri Lanka,including macroeconomic data,the development of the three major industries’ development,and the tax legal environment related to foreign investment,followed by a description of the status of bilateral trade cooperation between China and Sri Lanka.Based on the above background,examining various taxation categories related to foreign investment in Sri Lanka and sorting out changes in every tax category.The preferential tax policies and its changes are examined,and the industry orientation,regional orientation and incentive performance requirements of tax incentives are analyzed.Secondly,it analyzes the trade agreements signed between China and Sri Lanka and compares the impact factors of the tax burden between Sri Lanka and China.Measuring the macro tax burden rates of the two countries and examining the macro tax burden,and comparing the relevant parameters.In addition,evaluating the tax investment environment in Sri Lanka and explaining the investment advantages and risks one by one.Finally,it makes suggestions for Chinese "going out" enterprises in the aspect of international tax planning.To remind companies not only to pay attention to the use of preferential taxation policies,the differences in tax rates at home and abroad and collecting investment income in high and low tax areas in Sri Lanka.We should also attach importance to relevant anti-tax avoidance investigations in China and establish an intermediate holding company in accordance with the law.