Monday, July 26, 2021
Wei Cui (British Columbia; Google Scholar), What Does China Want From International Tax Reform?, 103 Tax Notes Int'l 141 (July 12, 2021):
The G-7 countries’ June 5 accord to implement a global minimum corporate tax rate promises to set off frenzied negotiations among nations regarding coordinated international tax reform. Finance ministers from the G-20 countries met in Venice on July 9-10, after this magazine went to press. Whether members of the G-7 club can persuade the larger group to endorse their minimum tax proposal will determine what mandate the OECD receives to continue the (re-)negotiations under pillars 1 and 2 of its program of work to develop a consensus solution. How will China respond to the G-7 proposal at the G-20 meeting? That question is especially intriguing, given the growing political antagonisms between China and some G-7 countries.
This article offers some broad reflections on how well aligned China’s recent international tax policy choices are with the G-7’s minimum tax proposal. The reflections are based on analyses of Chinese tax law and policy, and not on recent pronouncements by Chinese political leaders, diplomats, or commentators. The aim is not to predict the positions the Chinese government will take at the meeting or during further OECD negotiations; instead, it is to identify several tax policy priorities that emerged in recent years for the Chinese government that may be affected by the G-7’s global minimum tax proposal. In particular, it argues that in several striking ways, China can be seen as facing policy choices similar to many the United States has confronted.