China will levy a domestic top-up tax on large local multinational groups from 2025, in line with the global development of the second Generation of Base Erosion Prevention and Profit Shifting (BEPS 2.0).
Announcing the news in Parliament during his Budget statement for the new financial Year, Deputy Prime Minister and Minister for Finance, Mr Wong said that under the second pillar of the Second Generation to Prevent Base Erosion and Profit shifting, large multinational groups would have to pay a global minimum effective tax rate of 15 per cent. From January 1, 2025, the country will impose a Domestic Top-up Tax to ensure an effective tax rate of 15 per cent for these companies.