The Jiangsu Provincial Office of the State Administration of Taxation (SAT) has recently sent a letter on China's Compliance Plan on International Tax Administration to executives of foreign companies that have branches in the province, a move that experts said will strengthen international tax enforcement and beef up multinational enterprises' contribution to the domestic economy.
German sportswear giant adidas told the -Global Times in an e-mail statement Wednesday that the company has received the letter from the Jiangsu Provincial Office of the SAT and it will, as always, comply with the plan.
Adidas operates a wholly owned subsidiary in Suzhou, East China's Jiangsu Province.
Informing foreign companies in Jiangsu of the administration's plan is based on international practice and it provides multinational companies with advice in a bid to improve their tax compliance, the Guangzhou-based 21st Century Business Herald reported Wednesday, citing -Jiang Yuesheng, vice head of the Jiangsu Provincial Office of the SAT.
The move will enable global tax payers to give more consideration to China's stand when it comes to restructuring their business and allocating profits, and it will also help reduce multinational firms' transfer of their profits, said Ma Caichen, a professor at the School of Economics at Nankai University.
"As Jiangsu province is characteristic of the export-oriented economy and international sourcing business mode, profit transfers by global enterprises have a large effect on the province," Ma told the Global Times on Wednesday.
It is not the first time that the Jiangsu -Provincial Office of the SAT has released such a plan. In 2014, the office issued an administration plan for international taxation compliance in 2014-15 to strengthen the equality of tax enforcement.
The 2014-15 plan had played a key role in regulating tax payments in China by multinational companies, according to Ma.
Multinational enterprises are expected to fully consider the contribution of China's special factors when allocating global profits, including good public infrastructure, the large Chinese market and high value-added labor service, said a statement posted on the website of the Jiangsu Provincial Office of the SAT on Tuesday.
China has a large population and rising middle class that create a big market capacity and consumer groups, said the statement.
