Since the 1980s, the American corporate income tax rate has remained unchanged, all while OECD countries consistently started to reduce their own. The ambitious US tax reform aims for a key economic policy objective of the Trump Administration: to make the United States competitive again. Concerns around economic nationalism and even a trade war with China have arisen since the 45th President’s inauguration, inspired by the former White House Chief Strategist, Steve Bannon. However, since the alt-right ideologist’s dismissal in October and specially after his post-‘Fire and Fury’ fall from grace and subsequent ostracism in early January, the ‘America First’ speech has been played on a different tone. On January 26th, President Trump declared at Davos World Economic Forum that an 'America First policy is not America alone’ and emphasised that ‘The US is open for business’.
The reform main changes include lower rates, such as cutting the corporate tax rate to 15% and providing a one-time repatriation tax rate in international earnings saved overseas, and is aimed at persuading American companies to remit overseas profits home and even to bring their operations back to the United States. Some important MNCs have already announced that they will repatriate billions of USD to the US. The US tax bill holds out an incentive for American companies repatriating profits they have made in operations overseas. China has seen large investments by American companies, which is why it might be seriously affected if American companies begin to take advantage of this tax offer.
During this event, we will discuss the following topics regarding the impact of the new US tax system in the world’s second largest economy:
- What will the US Tax reform mean to China and to companies operating in China?
- Who are the businesses winners and the losers from the US Tax Reform?
- How will local investors’ confidence be affected? How will it impact on capital outflows? Will Chinese enterprises flee to the US for lower tax preferences?
- How will this reform affect the competitiveness of Chinese economy? Will it Make America Great Again?
- How should China policymakers answer?
Agenda
8:30 – 9:00 Registration
9:00 – 9:10 Opening words by Mr. Alexander Prautzsch, Chair of the Finance & Taxation Working Group,
European Chamber
9:10 – 9:40 Introduction to the U.S. Tax Reform bill and what it means for businesses operating in China by Mr.
Dervis Pajo, Partner, US Tax Consulting Group, PwC China
9:40 - 10:10 How will the new U.S. tax system affect the world’s second largest
economy? by Mr. Jianwei Xu, Vice President at Natixis.
10:10 – 10:30 Q&A Session
10:30 – 10:40 Closing Words by Mr. Alexander Prautzsch, Chair of the Finance & Taxation Working Group,
European Chamber
*Please note the views expressed in this event are those of our guest speakers and do not necessarily reflect the views of the European Chamber of Commerce in China.
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