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.

 

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-owned 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.

　　 (For the units that operate by means of contracting, leases and affiliation
,the contractors, the lessees or the person who are affiliated conduct taxable activities where the contractors operate with other parties in the name of the employers, the lessees or the persons

who affiliate  others and the employers shall undertake the relevant legal liabilities, the

employers shall be the taxpayers; otherwise, the contractors shall be taxpayers.

◆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, except
for the following circumstances:

 (1) Where a taxpayer subcontracts his transport business to other entities or individuals, the turnover shall be the balance of the total price and other charges received less the transport charges paid to other entities or individuals;

(2) Where a taxpayer is engaged in tourism business, the turnover shall be the balance of the total price and other charges received less the payments of accommodation, meals, transport and admission tickets of scenic spots made by the tourists to other entities or individuals and the tourism charges to other sub-contracted tourism enterprises;

(3) Where a taxpayer subcontracts construction engineering to other entities, the turnover shall be the balance of the total price and other charges received less the payments to other entities;

(4) For the trading of foreign exchanges, marketable securities and futures, the turnover shall be the balance of the sale price less the purchase price; and

(5) Other circumstances as prescribed by the competent financial and tax departments under the State Council.

　　“Other charges" mentioned above include handling fees, subsidies, funds, fund raising fees, profits returned, awarded fees, penalty for breach of contracts, overdue fine ,interests of deferred payment, compensation ,collection trusted, advance money for another, default interest and other sorts of charges, exclusive of the government funds or administrative charges collected on commission concurrently meeting the following conditions:

l   Government funds approved and established by the State Council or the Ministry of Finance and administrative charges approved and established by the State Council or the people’s governments and the competent finance and price authorities at provincial level;

l   Printed fiscal invoices by the finance department at or above provincial level which are issued while collecting charges; and

All charges shall be fully handed in to the treasury.

l   ◆The time when the obligation of the payment of business tax arises shall be the date on when the taxpayer provides taxable services, transfers intangible assets or sells real estates and receives the business incomes or obtains the certificates for collecting business incomes, unless otherwise specified by the competent financial and tax departments under the State Council.

The time when the obligation of the withholding of business tax arises shall be the date on which the obligation of the payment of business tax of the taxpayer arises.

◆ Taxable items and tax rates

 

Table of Business Tax Taxable Items and Tax Rates

 

 

3.  Enterprise Income Tax

 

◆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 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 within the period of March 1^st to March 25^th, and the second biannual tax payment being made within the period of  September 1^st to September 25^th.

 

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 mortgagees; 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 original value of the property after one final deduction equivalent to 25% of the original value 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 made within the period of March 1^st to March 25^th, and the second biannual tax payment shall be made within the period of September 1^st to September 25^th.

 

9. Land Appreciation Tax (levy since January 1^st,2006)

◆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