BEIJING, April 6: China on Friday published tax rules on foreign banks' local incorporation, adding further clarity to the conditions under which overseas lenders' operations will operate.

The regulations, published on the Web site of the State Administration of Taxation specify that asset transfers from foreign banks to their locally incorporated units and branches will be exempt from both the business tax and value-added tax.

Banks that incorporate locally will continue to receive any preferential tax treatment that they were previously granted, it said.

March 26, also state that the income taxes of local branches of a foreign bank will be paid by its China head office.

China late last year opened its banking sector to foreigners, requiring them to incorporate locally if they wanted to be treated in the same way as domestic ones. Since then a number of major global lenders, including Citigroup and HSBC have launched such units.—Reuters