Since the reforming and open policy is practiced, Chinese taxation system concerning foreigners(TSCE) played a positive role in absorbing foreign investment and promoting economic development. But with transforming Chinese economic strategy and accelerating the integration of the world's economy, the present TSCF reveals its disadvantage. There fore it needs to be improved, which is especially urgent with China's entering into WTO.The subject of TSCE is the tax favorable system of foreign-investment which is supposed to be the focus of the reform of the present TSCE. Referring to the regulations of WTO relevant to taxation, and the developed country and the developing country' s laws and experiences on preferential system of TSCE, this paper studies Chinese present preference system of TSCF and points out its problems like too many preference levels. At the same time, meeting WTO system and world economic integration' s trend, and combining the transformation of China' s economy strategic center, the paper discusses the direction of the tax favorable system of foreign-investment enterprise. And then the paper clarifies the renovation' s direction according to which a series of preference measures are proposed.
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