Chinanews, Beijing, Mar. 27 – The fast-growing Chinese economy attracts many transnational corporations to come to China for investment. While some foreign companies bring their advanced technologies and managerial experiences to China, there is a considerable number of transnational companies that divert their huge profits made in China to other countries in order to evade tax, the Economic Information Daily reported.

 

The National Statistics Bureau recently finished a report about research on foreign direct investment utilization and foreign-funded companies in China. The report shows that among all foreign companies that reported having run at a loss in China, two-thirds had not really lost money. Instead, these companies tried to avoid paying tax by taking the transferring pricing strategy. China lost 30 billion yuan of tax as a result of their tax evasion.

 

Some experts suggest that China should take countermeasures to prevent foreign companies from evading tax in China.