1.Enterprise Income Tax The enterprises and other organizations which have incomes (hereinafter referred to as the enterprises)within the territory of People's Republic of China shall be payers of the enterprise income tax and shall pay their enterprise income taxes. The enterprise income tax shall be levied at the rate of 25%. As regards a small meager-profit enterprise satisfying the prescribed conditions, the enterprise income tax shall be levied at a reduced tax rate of 20%. As regards important high-tech enterprises necessary to be supported by the state,the enterprise income tax shall be levied at the reduced tax rate of 15%. Note:Please refer to the Enterprise Income Tax Law of the People's Republic of China which is in the fourth part of this book for details. 2.Value Added Tax,Consumption Tax and Business Tax (1)Value Added Tax Enterprises or individuals who sell commodities,engage in repair and maintenance or import and export business in the territory of China are subject to value added tax in line with Chinese laws.The standard rate for value added tax is 17%,but the rate for a few commodities such as grain,cooking oil, running water,forage,fertilizer,pesticide,and farming machinery is 13%. (2)Consumption Tax Product,processing and importation of the following commodities in the territory of China are subject to consumption tax:tabacco,alcoholic drinks or alcohol, cosmetics, jewellery, fireworks, refined oil,automobile tyre, motorcycle and motorcar.Consumption tax is calculated in two ways.One way is to calculate according to quantity (gasoline is RMB 0.20 per litre).The other is to set tax rate according to the price of commodities (the rate for motorcar with its engine cylinder capacity under 2,200ml is 8%,between 2,000 to 2.500ml is 9%) (3)Business Tax Enterprises or individuals whose businesses are in the sectors of transportation, post and telecommunication,finance and insurance,construction,art,sports, entertainment,and services,or who transfer incorporeal properties,sell immovables in the territory of China are subject to business tax.Business tax rate is 3% or 5%,but the tax rate for entertainment sector is 5% or 20%. 3.Stamp Tax Activities involving purchases and sales,processing,contracting,leasing, transportation, storage, loan lending,property insurance,technology contract and property transfer vouchers,business account books and licenses etc are subject to stamp tax.The minimum rate of a stamp tax is 0.005% and the maximum is 0.1%.For licenses and business account books(not including the account books for stating funds),stamps shall be sticked on to each pieces. The price is RMB 5 a piece. 4.Property Tax The tax is levied at an annual rate of 1.2% on the original value of the real estate,after 20% is deducted therefrom.The tax rate is 12% if it is levied on the rental income.The newly constructed houses,which are built by the relevant foreign-invested enterprises themselves or purchased by the relevant foreign-invested enterprises in Pudong New Area and Economic and Technological Development Zones,shall be exempt from real estate tax for 5 years as of the month of completion of constructionor purchase. 5.Vehicle and Vessel Licence Tax All the vehicles owned and used by enterprises are subject to this tax according to"The Interim Regulations on the Vehicles and Vessels Operation Licence Tax".The tax rates are as follows: The Tax Rates of Vehicles and Vessel Licence Category | Type | Unit | Annual Tax yable | Motor Vehicles | Passenger Cars | Vehicle | RMB320 | Trucks | Ton | RMB60 | Motorcycle | 2 wheels | Vehicle | RMB60 | 3 wheels | Vehicle | RMB80 | Light-Duty Motorcycle | Vehicle | RMB20 | Temporary Licence | Ten days constitute a session.For each session at 3% of the tax of the said vehicle. If it is used for less than 10 days,it is regarded as 10 days. |
6.Individual Income Tax According to Individual Income Tax Law of the People's Republic of China: Individual income tax shall be levied by individuals who have domicile in China,or though without domicile but have resided for one year or more in China on their income derived from sources within and outside China. Individuals who are neither domiciled nor resident in China,or who are not domiciled and reside for less than one year in China,shall also pay individual income tax on income derived form sources within China. Individual Income Tax Rates (Applicable to income of wages and salaries) Grade | Monthly Income Taxable(RMB) | Tax Rates(%) | 1 | Income of 500 yuan or less | 5 | 2 | That part of income in excess of 500 to 2,000 yuan | 10 | 3 | That part of income in excess of 2,000 to 5,000 yuan | 15 | 4 | That part of income in excess of 5,000 to 20,000 yuan | 20 | 5 | That part of income in excess of 20,000 to 40,000 yuan | 25 | 6 | That part of income in excess of 40,000 to 60,000 yuan | 30 | 7 | That part of income in excess of 60,000 to 80,000 yuan | 35 | 8 | That part of income in excess of 80,000 to 100,000 yuan | 40 | 9 | That part of income in excess of 100,000 yuan | 45 |
The calculation of the taxable income amount For the income of wages and salaries,the taxable income amount shall be the balance after deducting 2000 Yuan from the monthly income since March 1st ,2008. For the conditions listed below,the taxable income amount shall be the balance after deducting 4800 Yuan from the monthly income. For a taxpayer who has no domicile within the territory of China but has obtained wage and salary income within the territory of China,or a taxpayer who has a domicile within the territory of China but has obtained wage and salar income abroad,an additional deduction for expenses may be determined in light of his average income level,living standards and the change of exchange rates. The scope and standards for the additional deduction for expenses shall be 2800 Yuan since March 1st ,2008. Note:Please refer to Law of the People's Republic of China on Individual Income Tax for details. |
