China will continue to exempt overseas institutions from paying corporate income tax and value-added tax on bond interest income earned in the Chinese bond market, the Ministry of Finance and the State Taxation Administration announced on Thursday.

The exemptions, which apply to foreign investors holding Chinese bonds, are effective from January 1, 2026, through December 31, 2027. The policy aims to attract and maintain international investment in China’s debt market while supporting its ongoing financial market opening.

This extension underscores China’s commitment to providing a favorable environment for global investors and strengthening the internationalization of its bond market, which has seen increasing participation from overseas institutions in recent years.