“China said on Thursday that it would temporarily exempt foreign companies from paying tax on their earnings, a bid to keep American businesses from taking their profits out of China following Washington’s overhaul of the United States tax code,” Sui-Lee Wee reports for The New York Times. “There is, however, a catch: To be eligible, foreign companies must invest those earnings in sectors encouraged by China’s government — including railways, mining, technology and agriculture — according to a statement from the Finance Ministry. The measure is retroactive from Jan. 1 this year, the ministry said.”
“The move would ‘promote the growth of foreign investment, improve the quality of foreign investment and encourage overseas investors to continuously expand their investment in China,’ the ministry said,” Wee reports. “The newly approved tax incentives in the United States could appeal to companies that are frustrated by China’s rising labor costs, ambitious local competitors and tangled legal systems, or those that would rather spend their money at home or elsewhere.”
“The American tax overhaul has been promoted by President Trump and other Republican leaders as a move to make the United States more competitive globally,” Wee reports. “China sets tight rules on how much money flows out of the country, as a way of controlling the value of its currency and keeping its financial system stable. A significant repatriation of foreign earnings could set off a broader capital flight, and weaken the country’s currency, the renminbi. And a sharp fall in the renminbi could spark a vicious cycle with even more companies — and possibly individuals — looking to minimize losses by moving their money out of China.”
Read more in the full article here.
MacDailyNews Take: Another win for Apple!
SEE ALSO:
Apple finally got its long-sought tax break to bring billions home. Your move Apple… – December 27, 2017
Apple expected to repatriate $214 billion to the U.S.; expect increased buybacks and dividends, not big acquisitions – December 22, 2017
Apple notches big league win with U.S. Republican tax cuts, but faces snag with taxes on foreign patents – December 21, 2017
Congressional Republicans deliver epic overhaul of U.S. tax laws to President Donald Trump – December 20, 2017
heh…and the war’s begun, Alvin Tostig had a son today.
and the [strike]war’s[/strike] race to the bottom’s begun
What will Tim Cook do? I am sure that Tim will do the right thing, don’t you?
sorry, China. now that the GOP has given corporations like Apple a giant tax cut, they won’t be using your slave-wage labor hahahaha . . . sorry, i couldn’t finish typing that with a straight face
Ironic, it was Tricky Dick (R) who corporate America used to first establish trade relations with communist China. Since then both corrupt US parties have sold their souls to cheap labor no matter what harm it did to the USA middle class. Corporate outsourcing to the communist IP theives has exponentially grown since then. Short term greed. The result has been a stagnant wage in the USA for two generations, with consumers buoying their quality of life through ill advised debt spending at all levels, near zero infrastructure modernization, and a steady flow of cheap disposable junk that Americans think makes them happy for a few months or less before it becomes landfill fodder. The rust belt now extends from coast to coast, with producers replaced by Amazon and Walmart warehouses.
The reality is since corporate leaders know that near slave wages for manufacturing is available in China and other Asian sweatshops, tax rates mean almost nothing. The tax rate in the USA would have to be negative to offset the wage rates that corporate America demands from its labor base in China.
I don’t see either of the two useless political parties doing anything to resolve the dramatic error that Tricky Dick and the economic idiots since then have made. But hey, as long as someone like the Walton Family or Jeff Bezos still lives most of the year in the USA and thus lifts up average income statistics, well then America must be great.
Just tell that to the working families living paycheck to paycheck through no fault of their own.
Those ‘working families living paycheck to paycheck’ buy the cheapest item on the shelves which is usually made in China. They don’t give a fat rats ass where it is made or who made it or how it was made … its just cheaper and they buy it so they can use more of their money to get by. Now if you think this is ‘unfair’, what are you going to do about it? Blog? Or blame Nixon? Or maybe blame Robert E. Lee? How much stuff are you buying from China buddy? Your house is full of stuff from there, as are most of your electronics. Now that idiotic moron Obama is gone, maybe Trump will make the situation better.
By twitter shaming?
After all the grief China has given Apple in the past few years… Apple really should diversify its assembly base.
Now, they even copy our tax policy. Morons.