China Extends Tax Exemption on Bond Interest for Foreign Institutional Investors

China's Ministry of Finance and State Administration of Taxation have jointly issued Announcement No. 5 of 2026, which provides for the extension of the corporate income tax and VAT exemption policy for bond interest income obtained by foreign institutional investors from investing in the domestic Chinese bond market. The prior exemption as per Announcement No. 34 of 2021 expired on 31 December 2025. The exemption as per Announcement No. 5 of 2026 applies from 1 January 2026 to 31 December 2…