This barrier is unrelated to the end of the transition period, following the United Kingdom's departure from the EU.

Public ID: PID-B7725B

UK law firms face discriminatory taxation in China

in China

Trade barrier summary

Overseas law firms in China pay a higher rate of tax than their Chinese counterparts, putting them at a competitive disadvantage. In China, overseas firms are taxed as 'permanent establishments' of non-resident entities under the Corporate Income Tax Law (CITL), and are required to pay a 25% corporate tax rate. Chinese firms are treated as 'individual businesses' for tax purposes, and pay 5% to 35%, according to a five-tier system.

In addition, employees of UK firms must pay a progressive tax on income, under the Individual Income Tax Law. This can be up to 45%. Chinese partners with local firms are often exempt from paying individual income tax.

Chinese law firms operating in the UK and their employees are treated equally under UK tax law, without discrimination.

Sectors affected

  • Financial and professional services



Date reported

26 April 2019

Last updated

29 November 2021

Public ID


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