Viewpoints from Kaizen

(1) Taxpayers The taxpayers of Land Appreciation Tax include enterprises, units, individual household businesses and other individuals who receive income from a disposal or other means of transfer with consideration of State-owned land use rights, buildings on land and their attached facilities (hereinafter referred to as transfer of real estate). (2) Tax base and tax rates The Land Appreciation Tax is based on the appreciation amount derived by the taxpayer from the transfer of real estate, which equals to the balance of proceeds received by the taxpayer on the transfer of real estate after deducting the sum of deductible items as prescribed. The Land Appreciation Tax adopts four levels of progressive rates; Table of Land Appreciation Tax Rates Level Tax base Tax rates 1 That part of the appreciation amount not exceeding 50% of the sum of deductible items 30% 2 That part of the appreciation amount exceeding 50%, but […]

(1) Taxpayers Any individual who has domicile in China or who has no domicile in China but has resided in China for one year or more shall pay Individual Income Tax on his world-wide income. Any individual who is neither domiciled nor resident in China or who has resided in China for less than one year shall pay Individual Income Tax on the income from sources inside China. (2) Taxable items and calculation of Individual Income Tax payable a. Wages and salaries Wages and salaries are taxed on the basis of the balance of taxpayer’s monthly wages and salaries after lump-sum deduction of 2,000 yuan as expenses and by applying the nine-grade progressive rates as shown in the table below. Individual Income Tax Rates Schedule (1) Grade Monthly Taxable Income Tax Rate (%) Quick Deduction 1 Income of 500 yuan or less 5 0 2 That part of income in […]

(1) Taxpayers a. Enterprises with foreign investment include Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and wholly foreign owned enterprises. b. Foreign enterprises include foreign companies, enterprises and other economic organizations which have establishments or places in China engaged in production or business operations or which, though without establishments or places in China, have income from sources within China. (2) Tax base The enterprises with foreign investment with head office in China pay income tax on their world-wide income. Foreign enterprises pay income tax only on their income derived from sources within China. The income tax base for enterprises with foreign investment and foreign enterprises is the taxable income which is the amount remaining from its gross income in a tax year after allowable deduction for costs, expenses and losses. Any foreign enterprise which has no establishment or place in China but derives income of profits, interest, rental, royalties […]

(1) Taxpayers House Property Tax is levied in cities, county capitals, townships and industrial and mining districts. Taxpayers are owners of house property, operational and managerial units of house property, mortgagees, custodians and users of house property (excluding enterprises with foreign investment, foreign enterprises and foreigners). (2) Tax base, tax rates and computation of tax payable Two different rates are applied to two different cases: in one case where the tax base is the residual value after the subtraction of 10% to 30% of the original value from the original value of the property, the tax rate is 1.2% ; in the other case where the tax base is the rental income from the property, the rate is 12%. The formula for calculating House Property Tax payable is: Tax payable =Tax base x Applicable rate (3) Major exemptions House Property Tax may be exempt on the house property for the […]

(1) Taxpayers This tax is imposed on enterprises, units, individual household businesses and other individuals who invest into fixed assets within the territory of the People’s Republic of China (excluding enterprises with foreign investment, foreign enterprises and foreigners). (2) Taxable items and tax rates Table of Taxable Items and Tax Rates Taxable Items Tax Rates A. Infrastructure 1. State urgent projects 2. Projects encouraged by the State but restricted by the condition of transportation and energy 3. Office buildings, hotels and guest houses 4. Residential buildings (including commercial residential buildings) 5. Other 0% 5% 30% 0% 5% 15% B. Renewal and transformation projects 1. State urgent projects (same as infrastructure) 2. Other renewal and transformation projects 0% 10% (For some residential building investment projects, the rate is 5%.) (3) Computation of tax payable This tax is based on the total investment actually put into fixed assets. For renewal and transformation […]

(1) Taxpayers Taxpayers are enterprises, units, individual household businesses and other individuals (except enterprises with foreign investment, foreign enterprises and foreigners) who occupy farmland for building construction or for other non-farm purposes. (2) Scope and tax payable per unit This tax is imposed on all State owned and collectively owned crop-planting land, and also on newly developed wasteland, fallow land, land for rotation of crops, land for rotation of grass and crops. Different ranges of tax per unit are specified for different regions in consideration of the average size of farmland occupied per person and the local economic situation. The annual amount of tax payable per square meter is: taking county as the administrative region for calculation (hereinafter the same), 2-10 yuan for county with one mu or less of farmland per person; 1. 6-8 yuan for county with 1-2 mu farmland per person; 1.3-6.5 yuan for county with 2-3 […]

(1) Taxpayers The taxpayers of Enterprise Income Tax include any state-owned enterprise, collective enterprise, private enterprise, joint operation enterprise, joint equity enterprise, and other organizations. (2) Tax base The taxpayers’ world-wide income from production and business operations and from other sources shall be subject to Enterprise Income Tax according to law. The Enterprise Income Tax is computed on the basis of the taxable income which is equal to the total income earned by the taxpayers in a tax year less allowable deductions for the same tax year. (3) Tax rates and computation of tax payable Normally, the amount of Enterprise Income Tax payable is computed on the basis of the taxable income and by applying the rate of 33%. The formula for computing the tax payable is: Income tax payable= Taxable income x 33% Besides the statutory rate, two lower rates of 18% and 27% are designed for some less […]

(1) Taxpayers The taxpayers of Deed Tax are those enterprises, units, individual household businesses and other individuals who are the transferees of house property transferred within the territory of China. (2) Tax base The Deed Tax is normally based on one of followings: a. The transactional price in case of sale/purchase of houses or sale or use right of State-owned land; b. Assessment made by tax collection offices in reference to the market price of land use right sale or house sale in case of transferring land use right or house as gift; or c. The difference of the land use right price and the house price in case of exchange of land use right and house. (3) Tax rates and computation of tax payable Deed Tax adopts a flat rate within the range of 3%-5%. The rate applicable in jurisdictions at provincial level shall be determined within the above […]

(1) Taxpayers The taxpayers of Consumption Tax include all enterprises, units, household businesses and other individuals engaged in production or importation of taxable consumer goods within the territory of the People’ s Republic of China. The taxable consumer goods exported by the taxpayers are exempt from Consumption Tax, unless the taxable consumer goods are restricted by the State from exportation. (2) Taxable items and tax rates Table of Consumption Tax Taxable Items and Rates Taxable items Tax rates (tax amount) Comments 1. Tobacco (1) Grade A Cigarettes (2) Grade B Cigarettes (3) Grade C Cigarettes (4) Cigars (5) Cut tobacco 50% 40% 25% 25% 30%   2. Alcoholic drinks and alcohol (1) white spirits made from cereal (2) white spirits made from potatoes (3) yellow spirits (4) beer (5) other alcoholic drinks (6) alcohol 25% 15% 240 yuan per tonne 220 yuan per tonne 10% 5%   3. Cosmetics 30% […]

(1) Taxpayers The enterprises of any nature, units, individual household businesses and other individuals (excluding enterprises with foreign investment, foreign enterprises and foreigners) who are obliged to pay Value Added Tax, consumption Tax and/or Business Tax are the taxpayers of City Maintenance and Construction Tax. (2) Tax rates and computation of tax payable Differential rates are adopted: 7% rate for city area, 5% rate for county and township area and 1% rate for other area. The tax is based on the actual amount of VAT, Consumption Tax and/or Business Tax paid by the taxpayers and paid together with the three taxes mentioned above. The formula for calculating the amount of the tax payable: Tax payable = Tax base x tax rate Applicable