Business Club December 2nd From December 1st onwards, the "super national treatment" of foreign-funded enterprises that lasted for many years in China officially ended. In fact, the "super national treatment" of foreign-funded enterprises is not only reflected in the tax policy. In the field of medicine, "original research medicine" may not be known to people. But it is this “original research drug†that is mainly produced by foreign pharmaceutical companies and can be priced separately by them. However, under the protection of the “super national treatment†policy, it enjoys several times higher prices than domestic drugs.
Astronomical foreign drugs
The reporter recently saw from a table entitled “Comparative Pricing for Original Research Drugs for Foreign Fundamentals of National Essential Drugs and Unified Pricing of Domestic Drugsâ€. The prices of the nine foreign-invested original research drugs listed in the table are higher than the average prices of home-made drugs of the same product. 1311%.
In the “pricing comparison tableâ€, captopril ranked first in the price difference. Captopril's trade name "Kaibotong" was first developed and marketed by Bristol-Myers Squibb in the United States in 1981, and has now expired. At present, a box of captopril with a specification of 12.5mg x 100 is priced at 160.00 yuan, and the unified guidance price of domestically produced and identical products is 6.90 yuan, with a spread of 2319%.
In the “pricing comparison tableâ€, the second largest spread is ciprofloxacin injection, and the trade name is “Sipuoleâ€. The drug manufacturer is Bayer Pharmaceuticals and currently has a patent period. 200mg/100ml specifications of ciprofloxacin injection was priced at 84.60 yuan separately, while domestically produced bottle costs 4.50 yuan, the price difference was 1880%.
The third-best spread is “Dextran Iron Injectionâ€. The drug size is 100mg: 2ml, and the original patent holder is Danish Neboa/s. The drug was 112.00 yuan each, and the price of the same domestic drug was 7.30 yuan, with a spread of 1534%.
In the comparison table, the smallest price difference is fluconazole capsules, foreign producers are Pfizer Inc., and specifications 50 mg x 7 are priced at 164.00 yuan. However, the domestic unified guide price is 25.50 yuan, and the spread between the two is 643 percent.
In addition, the other five drugs are nimodipine, ceftriaxone sodium, propafenone, citicoline, and carbamazepine, and the manufacturers are Bayer Healthcare, Roche, Abbott, Takeda The spreads of Industrial Co., Ltd. and Novartis Co., Ltd. were 1461%, 1340%, 1017%, 962%, and 647%, respectively.
Original research privilege
It is always one of the ills of the pharmaceutical industry that foreign-invested research drugs enjoy super-national treatment.
"Original research drug" refers to expired patented patented drugs and similar drugs (drugs that failed to apply for Chinese patent protection but were first listed in the country). In the domestic market, the original research drug is mainly concentrated in wholly foreign-owned and Sino-foreign joint venture pharmaceutical companies. Since 2000, China has granted the “private pricing†of the original research medicine so that these medicines can be successfully included in the basic medicine list and enjoy the same conditions for full reimbursement under the precondition that they are not restricted by the “price reduction of the essential medicinesâ€. . At present, of the 307 varieties of the Essential Drug List, 325 western medicine varieties in more than 70 companies enjoy separate pricing policies.
In fact, at present, most of the “original research drugs†in China are all drugs whose patent protection period has expired. There are a large number of generic drugs in China, but the original research drugs still enjoy separate pricing treatment.
The most extreme example is aspirin. Bayer has developed aspirin in Germany for 110 years, but the National Development and Reform Commission [2009] document 2498 still gives Bayer's aspirin alone pricing power. The price of aspirin enteric coated tablets with specifications of 100mg*30 is 18.8 yuan, but the same dose The lowest domestic drug is only 1.50 yuan.
Super national treatment
Domestically, domestic pharmaceutical companies have pointed to the concept of "original research drug" and the "separate pricing" policy.
The pharmaceutical companies interviewed generally stated that companies are also producing according to the “National Pharmacopoeia†standard. The same drugs, foreign-funded enterprises are more than ten times more expensive than domestic ones, and the quality must be many times higher than domestic enterprises? A person in the pharmaceutical industry told reporters that for many years the State protected the original research drug with the intention of encouraging foreign pharmaceutical companies to bring more innovative drugs into the Chinese market and use the market for technology. However, it was counterproductive that so-called patented medicines were not willing to get Chinese production, but instead positioned China as a product sales market.
Yu Mingde, president of the China Pharmaceutical Enterprise Management Association, has been calling for the cancellation of the original research drug. In an interview, he said that the “original research drug†is only a Chinese-specific concept. The expired patent is expired and has not been protected by law. However, administrative orders have given it new protection in the country, resulting in an unfair drug pricing mechanism.
Development and Reform Commission
On November 30, the National Development and Reform Commission issued a notice deciding to start reducing the maximum retail price of some separately-priced drugs on December 12th, and cancelled the eligibility for separate pricing for some drugs.
According to the list published by the National Development and Reform Commission, the ceiling price of 176 individually priced products was lowered. Officials of the National Development and Reform Commission said: "This time almost all foreign-funded drugs were priced down."
While lowering the price limit, the NDRC has eliminated the separate pricing qualifications for the 16 drugs. This is also the first time that the domestic price-setting department has cancelled the separate pricing on a large scale.
In fact, in July this year, the National Development and Reform Commission issued the “Measures for the Administration of Drug Price (Draft for Solicitation)â€. This is the first time since 2000 that the country has attempted to adjust the rules for the establishment of drug prices. The "Measures" clearly erased the reference to "original research drug" and "separate pricing," and proposed the rule that the price of patented drugs be lowered for three years.
Shortly after the "Measures" were issued, the China Pharmaceuticals Research and Development Committee of the Association of Foreign Invested Enterprises integrated the opinions of more than 20 foreign pharmaceutical companies and submitted them to the NDRC, requesting the retention of individual pricing rights. The reason is "this can encourage the innovation enthusiasm of domestic pharmaceutical companies."
Foreign companies exceeded the national treatment yesterday
The introduction of foreign capital in our city will not be affected
“The speed of the introduction of foreign-funded enterprises in the city is still growing at an alarming rate. The end of foreign companies’ over-national treatment has no impact on the introduction of foreign capital in the city and the foreign investment interest in our city.†An interview with reporters said that since the beginning of this year, the city's foreign investment has increased by more than 50% year-on-year. Our country began to impose urban maintenance and construction tax and education surtax on foreign-funded enterprises, which will not have a negative impact on the city's attraction of foreign investment, nor will it affect the enthusiasm of foreign-invested enterprises to invest in the city.
The person in charge analyzed that, as a matter of fact, as early as this time in the consolidation of urban construction tax and education surcharges of domestic and foreign-funded enterprises, business taxes and other major taxes have achieved the unification of domestic and foreign-funded enterprises, and the two taxes now involved in the reunification have been implemented. The tax rate is relatively low. For foreign-funded enterprises, the burden of taxes and fees is not large, and foreign companies must have the ability to afford them.
“Foreign companies entering the city must first consider the question of whether they can make money, and the second is the question of paying taxes. If you come to Chongqing to invest and make money, and you can make big profits, how will foreign companies care about that tax?†The person in charge said that there are many factors that can attract foreign investment in a city, and taxation is only one aspect. At present, China is in a period of rapid economic growth. As the only municipality inland and the only national center city, Chongqing has a better investment environment and development opportunities, and it has a strong attraction for foreign investment.
Foreign capital has no privilege from now on
The competition of enterprises is no longer afraid
"In the future, like the starting line of foreign companies, we will no longer be afraid to compete with them."
Wang Yan, general manager of Chongqing Keli Environmental Protection Service Co., told reporters yesterday that his company has been engaged in the “Four Dangers†service for 15 years and is the strongest professional company in Southwest China. However, since 1999, when their company competed for the business of a chain of foreign fast-food restaurants in Chongqing, it was often defeated by a Hong Kong-owned company. Because Wang Zong’s company must have a normal profit, the monthly service fee for each store should be at least 800 yuan. However, this Hong Kong-owned company can sign the contract with the other party at a price of 500 yuan to 600 yuan.
"How can they dare to sign such a low price? It is because domestic and foreign-funded enterprises are treated differently."
Wang Hao explained that in the corporate income tax, foreign-funded enterprises only pay 15%, and our domestic-funded enterprises must pay 33%. Foreign-funded enterprises do not pay urban construction tax and education surcharges, and we have to pay 7% of business tax for city taxation, and we also pay education surcharges at 3% of business tax. What is particularly uncomfortable is that there are limits on what fees are paid by our domestic-funded enterprises, and those that exceed the limit must be counted as profits and must be subject to income tax. For example, advertising fees and hospitality expenses cannot exceed 0.5% of income, and per capita wage income cannot exceed 800 yuan. Foreign-funded enterprises do not have these restrictions, and all costs can be made into costs.
“We have to run from other places than people do. Our service in Chongqing is more direct and efficient, and the quality of service is more secure. But obviously, according to the previous policy, we can’t come up with a The price of competition with them (referring to Hong Kong-owned enterprises), said Wang Xi finally.
News background
Domestic and Foreign Investment Enterprises Tax System
Completely unified from yesterday
The State Council recently issued a notice deciding to unify the maintenance and construction tax and education surtax system of domestic and foreign-funded enterprises and individual cities. This means that the tax system of foreign-funded enterprises in China is fully integrated.
According to the notice, since December 1, 2010, foreign-invested enterprises, foreign enterprises, and foreign individuals have applied the "Interim Regulations of the People's Republic of China on Urban Maintenance and Construction Tax" promulgated by the State Council in 1985 and the "Interim Regulations on the Collection of Educational Fees Approved in 1986". Provisions. The laws, regulations and policies issued by the State Council and the State Council's department of finance and taxation since 1985 and 1986 concerning urban maintenance and construction taxes and education surcharges apply to foreign-invested enterprises, foreign companies, and foreign individuals.
Related Links
Foreign companies are taxed in China
40% lower than domestic investment
At the beginning of reform and opening up, China has issued many preferential tax policies for foreign-funded enterprises. Among them, the most advanced treatment for foreign-funded enterprises is the “two exemptions, three reductions and half reductions†policy.
The policy stipulates that foreign-invested enterprises can enjoy the exemption of two years from the profit-making year and the halving of corporate income tax for three years. Foreign-invested enterprises encouraged by countries located in the central and western regions may, after the expiration of the five-year reduction and exemption period, also extend the income tax by three years. Foreign-invested and advanced technology-based enterprises can enjoy three-year tax exemption and a half-year reduction of corporate income tax for six years.
According to the analysis, the foreign-funded enterprises may be exempted from tax deductions of approximately 40% after they have obtained income tax concessions, plus deductible urban maintenance and construction taxes and education surtaxes. This means that foreign companies have a significant cost advantage over Chinese local companies. Reporter Liu Bin
Unification of the Tax System of Domestic and Foreign-funded Enterprises
â– From January 1, 1994, foreign-invested enterprises and foreign enterprises began to apply the unified VAT, consumption tax, and business tax regulations in China;
â– In December 2006, the newly revised Provisional Regulations on Urban Land Use Tax levied urban land use tax for foreign-invested enterprises and foreign enterprises for the first time;
â– In March 2007, the "Enterprise Income Tax Law" was promulgated, which unified the income tax system of domestic and foreign-funded enterprises. The income tax rates of domestic and foreign-funded enterprises are both 25%. Previously, the income tax rate for foreign-funded enterprises was 15%, that for joint ventures was 17%, and that for domestic-funded enterprises was 33%;
â– The "Implementation Regulations of the Corporate Income Tax Law" implemented on January 1, 2008, unified the pre-tax deduction policy for wages and salaries of domestic and foreign-funded enterprises;
â– On December 1, 2010, China unified the city maintenance and construction tax and education surtax system of domestic and foreign-funded enterprises, and imposed urban maintenance and construction tax and education surcharges on foreign-invested enterprises, foreign enterprises, and foreign individuals.
Astronomical foreign drugs
The reporter recently saw from a table entitled “Comparative Pricing for Original Research Drugs for Foreign Fundamentals of National Essential Drugs and Unified Pricing of Domestic Drugsâ€. The prices of the nine foreign-invested original research drugs listed in the table are higher than the average prices of home-made drugs of the same product. 1311%.
In the “pricing comparison tableâ€, captopril ranked first in the price difference. Captopril's trade name "Kaibotong" was first developed and marketed by Bristol-Myers Squibb in the United States in 1981, and has now expired. At present, a box of captopril with a specification of 12.5mg x 100 is priced at 160.00 yuan, and the unified guidance price of domestically produced and identical products is 6.90 yuan, with a spread of 2319%.
In the “pricing comparison tableâ€, the second largest spread is ciprofloxacin injection, and the trade name is “Sipuoleâ€. The drug manufacturer is Bayer Pharmaceuticals and currently has a patent period. 200mg/100ml specifications of ciprofloxacin injection was priced at 84.60 yuan separately, while domestically produced bottle costs 4.50 yuan, the price difference was 1880%.
The third-best spread is “Dextran Iron Injectionâ€. The drug size is 100mg: 2ml, and the original patent holder is Danish Neboa/s. The drug was 112.00 yuan each, and the price of the same domestic drug was 7.30 yuan, with a spread of 1534%.
In the comparison table, the smallest price difference is fluconazole capsules, foreign producers are Pfizer Inc., and specifications 50 mg x 7 are priced at 164.00 yuan. However, the domestic unified guide price is 25.50 yuan, and the spread between the two is 643 percent.
In addition, the other five drugs are nimodipine, ceftriaxone sodium, propafenone, citicoline, and carbamazepine, and the manufacturers are Bayer Healthcare, Roche, Abbott, Takeda The spreads of Industrial Co., Ltd. and Novartis Co., Ltd. were 1461%, 1340%, 1017%, 962%, and 647%, respectively.
Original research privilege
It is always one of the ills of the pharmaceutical industry that foreign-invested research drugs enjoy super-national treatment.
"Original research drug" refers to expired patented patented drugs and similar drugs (drugs that failed to apply for Chinese patent protection but were first listed in the country). In the domestic market, the original research drug is mainly concentrated in wholly foreign-owned and Sino-foreign joint venture pharmaceutical companies. Since 2000, China has granted the “private pricing†of the original research medicine so that these medicines can be successfully included in the basic medicine list and enjoy the same conditions for full reimbursement under the precondition that they are not restricted by the “price reduction of the essential medicinesâ€. . At present, of the 307 varieties of the Essential Drug List, 325 western medicine varieties in more than 70 companies enjoy separate pricing policies.
In fact, at present, most of the “original research drugs†in China are all drugs whose patent protection period has expired. There are a large number of generic drugs in China, but the original research drugs still enjoy separate pricing treatment.
The most extreme example is aspirin. Bayer has developed aspirin in Germany for 110 years, but the National Development and Reform Commission [2009] document 2498 still gives Bayer's aspirin alone pricing power. The price of aspirin enteric coated tablets with specifications of 100mg*30 is 18.8 yuan, but the same dose The lowest domestic drug is only 1.50 yuan.
Super national treatment
Domestically, domestic pharmaceutical companies have pointed to the concept of "original research drug" and the "separate pricing" policy.
The pharmaceutical companies interviewed generally stated that companies are also producing according to the “National Pharmacopoeia†standard. The same drugs, foreign-funded enterprises are more than ten times more expensive than domestic ones, and the quality must be many times higher than domestic enterprises? A person in the pharmaceutical industry told reporters that for many years the State protected the original research drug with the intention of encouraging foreign pharmaceutical companies to bring more innovative drugs into the Chinese market and use the market for technology. However, it was counterproductive that so-called patented medicines were not willing to get Chinese production, but instead positioned China as a product sales market.
Yu Mingde, president of the China Pharmaceutical Enterprise Management Association, has been calling for the cancellation of the original research drug. In an interview, he said that the “original research drug†is only a Chinese-specific concept. The expired patent is expired and has not been protected by law. However, administrative orders have given it new protection in the country, resulting in an unfair drug pricing mechanism.
Development and Reform Commission
On November 30, the National Development and Reform Commission issued a notice deciding to start reducing the maximum retail price of some separately-priced drugs on December 12th, and cancelled the eligibility for separate pricing for some drugs.
According to the list published by the National Development and Reform Commission, the ceiling price of 176 individually priced products was lowered. Officials of the National Development and Reform Commission said: "This time almost all foreign-funded drugs were priced down."
While lowering the price limit, the NDRC has eliminated the separate pricing qualifications for the 16 drugs. This is also the first time that the domestic price-setting department has cancelled the separate pricing on a large scale.
In fact, in July this year, the National Development and Reform Commission issued the “Measures for the Administration of Drug Price (Draft for Solicitation)â€. This is the first time since 2000 that the country has attempted to adjust the rules for the establishment of drug prices. The "Measures" clearly erased the reference to "original research drug" and "separate pricing," and proposed the rule that the price of patented drugs be lowered for three years.
Shortly after the "Measures" were issued, the China Pharmaceuticals Research and Development Committee of the Association of Foreign Invested Enterprises integrated the opinions of more than 20 foreign pharmaceutical companies and submitted them to the NDRC, requesting the retention of individual pricing rights. The reason is "this can encourage the innovation enthusiasm of domestic pharmaceutical companies."
Foreign companies exceeded the national treatment yesterday
The introduction of foreign capital in our city will not be affected
“The speed of the introduction of foreign-funded enterprises in the city is still growing at an alarming rate. The end of foreign companies’ over-national treatment has no impact on the introduction of foreign capital in the city and the foreign investment interest in our city.†An interview with reporters said that since the beginning of this year, the city's foreign investment has increased by more than 50% year-on-year. Our country began to impose urban maintenance and construction tax and education surtax on foreign-funded enterprises, which will not have a negative impact on the city's attraction of foreign investment, nor will it affect the enthusiasm of foreign-invested enterprises to invest in the city.
The person in charge analyzed that, as a matter of fact, as early as this time in the consolidation of urban construction tax and education surcharges of domestic and foreign-funded enterprises, business taxes and other major taxes have achieved the unification of domestic and foreign-funded enterprises, and the two taxes now involved in the reunification have been implemented. The tax rate is relatively low. For foreign-funded enterprises, the burden of taxes and fees is not large, and foreign companies must have the ability to afford them.
“Foreign companies entering the city must first consider the question of whether they can make money, and the second is the question of paying taxes. If you come to Chongqing to invest and make money, and you can make big profits, how will foreign companies care about that tax?†The person in charge said that there are many factors that can attract foreign investment in a city, and taxation is only one aspect. At present, China is in a period of rapid economic growth. As the only municipality inland and the only national center city, Chongqing has a better investment environment and development opportunities, and it has a strong attraction for foreign investment.
Foreign capital has no privilege from now on
The competition of enterprises is no longer afraid
"In the future, like the starting line of foreign companies, we will no longer be afraid to compete with them."
Wang Yan, general manager of Chongqing Keli Environmental Protection Service Co., told reporters yesterday that his company has been engaged in the “Four Dangers†service for 15 years and is the strongest professional company in Southwest China. However, since 1999, when their company competed for the business of a chain of foreign fast-food restaurants in Chongqing, it was often defeated by a Hong Kong-owned company. Because Wang Zong’s company must have a normal profit, the monthly service fee for each store should be at least 800 yuan. However, this Hong Kong-owned company can sign the contract with the other party at a price of 500 yuan to 600 yuan.
"How can they dare to sign such a low price? It is because domestic and foreign-funded enterprises are treated differently."
Wang Hao explained that in the corporate income tax, foreign-funded enterprises only pay 15%, and our domestic-funded enterprises must pay 33%. Foreign-funded enterprises do not pay urban construction tax and education surcharges, and we have to pay 7% of business tax for city taxation, and we also pay education surcharges at 3% of business tax. What is particularly uncomfortable is that there are limits on what fees are paid by our domestic-funded enterprises, and those that exceed the limit must be counted as profits and must be subject to income tax. For example, advertising fees and hospitality expenses cannot exceed 0.5% of income, and per capita wage income cannot exceed 800 yuan. Foreign-funded enterprises do not have these restrictions, and all costs can be made into costs.
“We have to run from other places than people do. Our service in Chongqing is more direct and efficient, and the quality of service is more secure. But obviously, according to the previous policy, we can’t come up with a The price of competition with them (referring to Hong Kong-owned enterprises), said Wang Xi finally.
News background
Domestic and Foreign Investment Enterprises Tax System
Completely unified from yesterday
The State Council recently issued a notice deciding to unify the maintenance and construction tax and education surtax system of domestic and foreign-funded enterprises and individual cities. This means that the tax system of foreign-funded enterprises in China is fully integrated.
According to the notice, since December 1, 2010, foreign-invested enterprises, foreign enterprises, and foreign individuals have applied the "Interim Regulations of the People's Republic of China on Urban Maintenance and Construction Tax" promulgated by the State Council in 1985 and the "Interim Regulations on the Collection of Educational Fees Approved in 1986". Provisions. The laws, regulations and policies issued by the State Council and the State Council's department of finance and taxation since 1985 and 1986 concerning urban maintenance and construction taxes and education surcharges apply to foreign-invested enterprises, foreign companies, and foreign individuals.
Related Links
Foreign companies are taxed in China
40% lower than domestic investment
At the beginning of reform and opening up, China has issued many preferential tax policies for foreign-funded enterprises. Among them, the most advanced treatment for foreign-funded enterprises is the “two exemptions, three reductions and half reductions†policy.
The policy stipulates that foreign-invested enterprises can enjoy the exemption of two years from the profit-making year and the halving of corporate income tax for three years. Foreign-invested enterprises encouraged by countries located in the central and western regions may, after the expiration of the five-year reduction and exemption period, also extend the income tax by three years. Foreign-invested and advanced technology-based enterprises can enjoy three-year tax exemption and a half-year reduction of corporate income tax for six years.
According to the analysis, the foreign-funded enterprises may be exempted from tax deductions of approximately 40% after they have obtained income tax concessions, plus deductible urban maintenance and construction taxes and education surtaxes. This means that foreign companies have a significant cost advantage over Chinese local companies. Reporter Liu Bin
Unification of the Tax System of Domestic and Foreign-funded Enterprises
â– From January 1, 1994, foreign-invested enterprises and foreign enterprises began to apply the unified VAT, consumption tax, and business tax regulations in China;
â– In December 2006, the newly revised Provisional Regulations on Urban Land Use Tax levied urban land use tax for foreign-invested enterprises and foreign enterprises for the first time;
â– In March 2007, the "Enterprise Income Tax Law" was promulgated, which unified the income tax system of domestic and foreign-funded enterprises. The income tax rates of domestic and foreign-funded enterprises are both 25%. Previously, the income tax rate for foreign-funded enterprises was 15%, that for joint ventures was 17%, and that for domestic-funded enterprises was 33%;
â– The "Implementation Regulations of the Corporate Income Tax Law" implemented on January 1, 2008, unified the pre-tax deduction policy for wages and salaries of domestic and foreign-funded enterprises;
â– On December 1, 2010, China unified the city maintenance and construction tax and education surtax system of domestic and foreign-funded enterprises, and imposed urban maintenance and construction tax and education surcharges on foreign-invested enterprises, foreign enterprises, and foreign individuals.
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