The State Council is planning to temporarily exempt the income tax and value-added tax from overseas institutions for the interest income of their investment in the Chinese bond market, according to the Chinese government official website gov.cn.

The tax exemption period is tentatively set for three years.

This is part of the government’s effort to promote a higher level of opening up to the world.

It also comes with other tax cuts: lenders who offer small and micro enterprises as well as self-employed businessmen with a loan more than one trillion yuan (US$150 billion) are now exempted from VAT tax on interest revenue, compared to the previous five million yuan credit limit.

Taking the above measures into account, it is expected that the corporate tax burden will be reduced by more than 45 billion yuan throughout the year.