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1. Individual Income Tax
Individual Income Tax shall be paid by individuals who have domicile in China, or though without domicile, yet have resided in China for one year or more 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 resident for less than one year in China, shall pay individual income tax on their income derived from sources within China.
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Taxable Income Item |
Deductions |
Tax Rate |
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1 |
Income from wages, salaries |
Before March,2008 |
After March, 2008 |
5%-45%
(see Table 1) |
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1600 yuan for Chinese citizens,4800 yuan for expatriates
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2000 yuan for Chinese citizens,4800 yuan for expatriates
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2 |
Income from sole proprietorship or other self-employment business |
A deduction of 1600 yuan per month is allowed for the costs, expenses and losses deducted |
A deduction of 2000 yuan per month is allowed for the costs, expenses and losses deducted |
5%-35%
(see Table 2) |
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3 |
Income from contracted or leased operations of business
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A deduction of
1600 yuan per month is allowed for the costs, expenses and losses deducted |
A deduction of
2000 yuan per month is allowed for the costs, expenses and losses deducted |
5%-35%
(see Table 2) |
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4 |
Income from remuneration for labor service |
A deduction of 800 yuan from an income of less than 4000 yuan,and a deduction of 20% for expenses from the gross income of more than 4000 yuan,and the excess thereof shall be the taxable income |
20%,
A flat rate of 20% of individual income tax shall be applicable. Tax shall be levied on particularly high income by additional percentage points.
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5 |
Income from interests and dividends |
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20% |
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6 |
Income from author’s remuneration |
Same as item 4 |
20%,
A flat rate of 20% and the tax payable shall be reduced by 30%.
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7 |
Income from royalties |
Same as item 4 |
20% |
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8 |
Income from rental property |
Same as item 4 |
20% |
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9 |
Income from the sale of property |
The balance of the gross income from the transfer after the deduction of the original value thereof and reasonable expenses shall be the taxable income
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20% |
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10 |
Contingent income |
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20%
Income from the welfare lottery below 10000 yuan is exempt from the tax. |
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11 |
Other income items specified as taxable by the financial departments under the State Council
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20% |
Table 1 of Individual Income Tax Rates
(applied to income from wages and salaries)
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Grade |
Monthly Taxable Income |
Tax Rate |
Quick Calculation Deduction |
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1 |
Not over 500 yuan |
5% |
0 |
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2 |
Over 500 yuan but not over 2,000 yuan |
10% |
25 |
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3 |
Over 2,000 yuan but not over 5,000 yuan |
15% |
125 |
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4 |
Over 5,000 yuan but not over 20,000 yuan |
20% |
375 |
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5 |
Over 20,000 yuan but not over 40,000 yuan |
25% |
1375 |
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6 |
Over 40,000 yuan but not over 60,000 yuan |
30% |
3375 |
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7 |
Over 60,000 yuan but not over 80,000 yuan |
35% |
6375 |
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8 |
Over 80,000 yuan but not over 100,000 yuan |
40% |
10375 |
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9 |
Over 100,000 yuan |
45% |
15375 |
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Table 2 of Individual Income Tax Rates
(Applied to income from sole proprietorship or other self-employment business, and income from contracted or leased operation of business)
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Grade |
Yearly Taxable Income |
Tax Rate |
Quick Calculation Deduction |
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1 |
Not over 5,000 yuan |
5 |
0 |
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2 |
Over 5,000 yuan but not over 10,000 yuan |
10 |
250 |
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3 |
Over 10,000 yuan but not over 30,000 yuan |
20 |
1250 |
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4 |
Over 30,000 yuan but not over 50,000 yuan |
30 |
4250 |
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5 |
Over 50,000 yuan |
35 |
6750 |
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2. Business Tax
Within the border of the People’s Republic of China, individuals or organizations engaged in the provision of taxable services, the transfer of intangible assets or the sale of immovable properties, shall be taxpayers subject to Business Tax and shall pay Business Tax.
◆Taxpayers of Business Tax include state-owned enterprises, collectively-oened enterprises, private enterprises, joint stock enterprises, other enterprises and administrative units, institutions, military units, social groups and other units. Sole proprietor or other self-employee, enterprises with foreign investment and foreign enterprises are also included.
In the case of contracted or leased operation of business, the lessee or contractor shall be the taxpayer.
◆Tax payable = turnover X Tax rate
The turnover of the taxpayer shall comprise all the payments for the provision of service, the transfer of intangible assets and the sale of immovable property and other charges.
“Other charges" mentioned above include commissions, fund raising fees, collections entrusted, advance payment and other charges of all descriptions in addition to the price of taxable goods and service.
◆The time when liability to Business Tax arises shall be the day when the taxpayer receives the payment or a bill payable for the payment of the transaction.
◆ Taxable items and tax rates
Table of Business Tax Taxable Items and Tax Rates
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Taxable items |
Tax rates |
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1. communications and transportation |
3% |
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2. construction |
3% |
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3. financial and insurance businesses |
8% |
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4. post and tele-communication |
3% |
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5. culture and sports |
3% |
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6. entertainment |
5%-20% |
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7. services |
5% |
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8. transfer of intangible assets |
5% |
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9. sales of immovable properties |
5% |
◆All enterprises and other income generating organizations (the sole proprietorship enterprises and the partnership enterprises not included) within the territory of the People's Republic of China shall pay Enterprise Income Tax in accordance with the provisions of The Law of the People’s Republic of China on Enterprise Income Tax.
◆“Enterprises established in accordance with the laws in China” as stated in the Enterprise Income Tax Law shall include resident enterprises and non-resident enterprises.
The “resident enterprises” shall refer to Enterprises that are established in China in accordance with the law, or that are established in accordance with the law of the foreign country (region) with actual administration institution in China, which include state-owned enterprises, collectively-owned enterprises, private enterprises, joint stock enterprises, stock enterprises, joint ventures, enterprises with foreign investment ,foreign enterprises, associations ,non-governmental organizations and other income generating organizations.
The “non-resident enterprises” shall refer to Enterprises that are establieshed in accordance with the law of the foreign country (region) whose actual administration institution is outside China, but has set up institutions or establishments in China or has income derived from China without setting up institutions or establishments in China.
◆The taxation basis is the taxable income of the enterprises. The remainder derived from the total income in each taxable year of Enterprises, after deduction of the non-taxable income, tax-exempted income, other deductions and the making up of losses of previous years shall be the taxable income.
◆Income obtained by Enterprises from various sources in monetary and non-monetary terms shall be the total income in accordance with the Enterprise Income Tax Law.
◆The rate of enterprise income tax shall be 25%. Since January 1, 2008, Enterprises established in Xiamen that enjoyed low preferential tax rate at the current period may gradually transit to the tax rate mandated by the new law during the first five years of the implementation: enterprises enjoying the rate of 15% shall be adjusted to 18% in 2008 , 20% in 2009; 22% in 2010, 24% in 2011 and 25% from 2012 ; enterprises enjoying the rate of 24% shall be adjusted to 25% from 2008. Enterprises enjoying low preferential tax rate refer to those having registered in the Administration for Industry and Commerce and other registration administrative organs before March 16, 2007. The items and scope of the transitional preferential tax policy is in accordance with The Table of Implementation of The Transitional Preferetial Policies in Respect of Enterprise Income Tax. ◆Enterprise income tax shall be prepaid on a monthly or quarterly basis. The taxable year starts from 1 January to 31 December of a calendar year.
◆Enterprises shall submit a prepaid enterprise income tax return to the tax authority within 15 days of the end of the month or the quarter to make tax prepayment.
Enterprises shall submit an annual enterprise income tax return to the tax authority within five months of the end of the year and make the settlement of the payable and refundable tax payment.
4. Vehicle and Vessel Usage Tax
All owners and operators of vehicles and vessels, including institutions and individuals owing vehicles or vessels within the territory of the People's Republic of China shall be the payers of vehicle and vessel usage tax. "Institutions" refer to governmental agencies, public institutions, social organizations and various enterprises. "Individuals" refers to both native and foreign residents. The owners and operators of taxable vehicles and vessels have the right to distribute tax to the users of such vehicles and vessels, in lieu of their own obligations.
5. Resource Tax
Any organization or individual engaged in the exploitation of the mineral products or the production of salt for sale or for self use within the territory of the People's Republic of China shall be a payer of resource tax. The sales volume or the volume for self use shall be the calculation of taxable unit amounts, measured in Ton or Cubic Meters, by the amount of tax specified for that resource.
6. Urban and Township Land Use Tax
◆An organization or individual using land shall be a payer of urban and township land use tax. The computation of land use tax shall be based on the amount of area actually occupied by taxpayers.
◆The annual tax amount payable = taxable area of the land × tax amount per square meter of land per year
◆The yearly amount of tax shall be paid every half a year with first biannual tax payment being made before the end of March and the second biannual tax payment being made before the end of September.
7. Stamp Duty
◆ All institutions and individuals establishing or accepting deeds or other instruments within the territory of the People's Republic of China shall be the payers of stamp duty. The following are taxable deeds and instruments according to the provisions of the "Provisional Regulations on Stamp Duty of the People's Republic of China": Contracts or other deeds and instruments in the nature of contracts of purchases and sales, processing, construction projects, lease of property, cargo shipment, storage and warehousing, loans, property insurance and technology transfers; deeds of transfers of proprietary rights; business account books; certificates of rights and licenses; other documents specified as taxable by the Ministry of Finance.
◆Stamps shall be affixed at the time of establishment or acceptance of a deed. A taxpayer shall assess the amount of tax payable at different proportionate tax rates or by unit norms in the light of the nature of the deeds and instruments. The current proportionate rates for stamp duty are 0.1%, 0.05%, 0.03% and 0.005% while a stamp with a face of 5 yuan shall be affixed to other account books and documents of ownership or permit each.
◆Payment of stamp duty shall be considered fulfilled once for all on the deed based as having been assessed. In case two or more copies of a deed are required to be kept by two or more parties concerned, stamps shall be affixed in full amount to each copy by each party. And in case a deed already stamped where the sum of money indicated has increased after a revision, the additional sum established on the deed shall require additional tax stamps to be affixed.
◆ A stamp once affixed cannot be reused. Tax stamps shall be affixed to the deed taxable and cancelled on the border thereof by a seal print or lines executed by the taxpayer. In the case of a taxable deed with the amount of tax payable exceeding 500 yuan, the taxpayer shall file tax returns or fill tax payment forms to the tax authorities and affix one of the copies thereof on the taxable deed and the tax authorities shall write a verification of the tax payment on the taxable deed as a substitute of the stamps.
◆In order to simplify the procedure, in the case of a large amount of the stamp duty or the need of frequent stampings, the taxpayer may apply to the tax authorities for pooled payment for the amounts of stamp duty payable or by installment payment in stead of stampings.
8. House Property Tax
◆House Property Tax shall be paid by the owner of the real estate or the lessee thereof; and in the absence of the owner or lessee thereof or pending resolution of the dispute over the ownership or the lease thereof, the agent or user thereof shall pay the tax.
◆House Property Tax shall be levied based on the depreciated book value of the taxable real estate annually.
◆House Property Tax shall be levied annually on the standard housing price at the rate of 1.2% while the standard renting price at the rate of 12%.
◆Annual House Property Tax allowance shall be paid on a half-yearly basis. And the biannual payment time limit for the first half year shall be before the end of March and the second biannual payment before the end of September.
9. Land Appreciation Tax (levy since September 1st, 2005)
◆Institutions and individuals with returns from the transfer of use right of state-owned land, buildings and other attachments thereon shall be payers of land appreciation tax and pay land appreciation tax on the basis of the appreciation a taxpayer receives from realty transfer at the tax rate as provided.
◆The amount of land value appreciation shall be the balance of the income of a taxpayer from a realty transfer after deductions of items deductible as provided.
◆ The amount of land value appreciation tax payable = The amount of increment × an applicable tax rate － value of the deductible items × a deduction coefficient for quick computation
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