GIVE AND TAKE

TAX

How the new law will change the tax structure for companies outside economic zones

Current

Domestic tax rate

Annual taxable income 30,000 yuan 18 per cent

Annual taxable income 30,000-100,000 yuan 27 per cent

Other companies (excluding hi-tech) 33 per cent

Hi-tech companies 15 per cent

Under the new law

Domestic and overseas

Small and low profit margin companies (not clearly defined but said to include most HK-invested companies on the mainland) : 20 per cent in five years

Other companies (excluding hi-tech): 25 per cent

Hi-tech firms: 15 per cent (unchanged)

The draft retains preferential tax policy, on, among others, firms that invest in agriculture, forestry, fisheries and infrastructure construction

PROPERTY

Key points of the lgislation

Equal protection of state and private property

Units and individuals will be compensated for their expropriated houses and tangible assets

Farmers will be compensated if the collectively owned rural lands were expropriated

Denial or withholding of such compensation is strictly prohibited

Farm contracts cannot be invalidated arbitrarily

Land-use rights for residential land will be renewed upon expiration

Conversion of farms into land for construction purposes under strict control

Land confiscated due to natural disasters must be compensate