Viewpoints

Items VAT Small-scale Taxpayers VAT General Taxpayer 1 Application Criteria ·         Company shall be ratified as VAT small-scale taxpayer when registration with no need for separate application; ·         The company’s annual taxable sales shall not exceed RMB5 million. ·         The company shall apply for the qualification of VAT general taxpayer when its annual taxable sales reach or exceed RMB 5 million, if not apply, it shall be compulsorily ratified as VAT general taxpayer; ·         Newly registered company or company with annual taxable sales not exceeding RMB5 million can apply for the qualification of VAT general taxpayer if it has fixed operation place and can provide legal and valid vouchers and accurate tax filing data. 2 Tax and Levy Rate The applicable levy rate is 3%. The applicable tax rate is divided into four levels, 16%, 10%, 6% and 0% respectively. 3 Tax Filing Method VAT and its surcharges shall be […]

(1) Duty payers The payers of Customs Duties include consignees who import goods permitted by China and consignors who export goods permitted by China, the former shall pay import duties and the latter shall pay export duties.   (2) Tariff rates The tariff rates include import duty rates and export duty rates. The tariff rates for imports fall into two categories; general tariff rates and preferential tariff rates. The general tariff rates apply to the imports originating in the countries with which the People’s Republic of China has not concluded most-favoured-nation trade agreements; the preferential tariff rates apply to imports originating in the countries with which the People’s Republic of China has concluded most-favoured-nation trade agreements. In 1999, there are 6, 940 tariff numbers for imported goods in the Classifications. The general tariff rates for importation range from 0%, 8% to 270% with over 20 different rates. The preferential tariff […]

9.1. Application Time Limits and Requirements 9.1.1. Where an enterprise with foreign investment or a foreign enterprise with an establishment or site in China for production or business operations, moves to a new site, merges with another enterprise, breaks up, winds up or makes a change in any of the main entries of registration, it shall present the relevant documentation to, and go through registration procedures or change or cancellation of its registration with, the local taxation authorities, after the relevant event is registered or a change or cancellation in registration has been made with the Industrial and Commercial Administration Department. 9.1.2. Income Tax on enterprises and local Income Tax shall be calculated on an annual basis and paid in advance in quarterly installments. Such payments shall be made within 15 days from the end of each quarter and the final settlement shall be made within 5 months from the […]

8.1 Basic Regulations 8.1.1 The State shall, in accordance with its industrial policies, guide the orientation of foreign investment and encourage the establishment of enterprises with foreign investment which adopt advanced technology and equipment and export all or the greater part of their production. (ZHU XI LING [45] 1991.4.9) 8.1.2 Foreign investment enterprises encouraged by the State which request preferential treatments in relation to enterprise Income Tax shall be treated in accordance with the relevant laws and administrative regulations promulgated by the State. (GUO WU YUAN LING [85] 1991.6.30) 8.2 Lowering Tax Levy Tax Rates 8.2.1 The Income Tax on enterprises with foreign investment established in special economic zones, foreign enterprises which have establishments or sites in special economic zones engaged in production or business operations, and enterprises with foreign investment of a production nature in economic and technological development zones shall be levied at the reduced rate of 15%. […]

7.1 Basic Regulations 7.1.1 Any foreign enterprise which has no establishment or site in China but derives profits, interest, rental, royalties or other income from sources in China, or which, though it has an establishment or site in China and derives such income which however is not effectively connected with such e-statement or site, shall pay an Income Tax of 20% on such income. (ZHU XI LING [45] 1991.4.9) 7.1.2 Profit, interest, rentals, royalties or other income′ referred to in Paragraph 1, Article 19 of the Tax Law shall be assessed on the full amount of taxable income, unless otherwise provided by the State. (GUO WU YUAN LING [85] 1991.6.30) 7.1.3 Income obtained by the foreign enterprise from jointly issuing movies and TV programs in China with Chinese film producers, is income from copyright from sources inside China collected by the foreign enterprise who has no establishment or site in […]

6.1 Basic Regulations 6.1.1 Enterprise Income Tax of enterprises with foreign investment and the Income Tax payable by foreign enterprises on the income of their organizations or sites in China for production or business purposes, shall be calculated on taxable income at a rate of 30%; local Income Tax shall be calculated on taxable income at a rate of 3%. 6.1.2 Enterprises with foreign investment may, when filing a consolidated Income Tax return, deduct from the amount of tax payable the foreign Income Tax already paid abroad in respect of income derived from sources outside China. The amount deducted, however, may not exceed the amount of Income Tax otherwise payable under this Law with respect to income derived from sources outside China. (ZHU XI LING [45] 1991.4.9) 6.1.3 Income Tax already paid abroad in Article 12 of the Tax Law refers to the Income Tax actually paid outside China, by […]

5.1 In business transactions between an enterprise with foreign investment or the establishments or sites set up in China by a foreign enterprise for production or business operations, and its associated enterprise, the payment or receipt of charges or fees shall be made in the same way as the payment or receipt of charges or fees in business transactions between independent enterprises. Where the payment or receipt of charges or fees is not made in the same way as business transactions between independent enterprises and results in a reduction of taxable income, the taxation authorities have the right to make reasonable adjustments. (ZHU XI LING [45] 1991.4.9) 5.2 Associated enterprises refer to companies, enterprises and other economic organizations that have any of the following relationships with other enterprises: A. relationships of existing direct or indirect ownership of, or control over, such matters as finance, business operations or purchases and sales; […]

4.1 Fixed Assets and their Depreciation 4.1.1 Fixed assets of enterprises refer to houses, buildings and structures, machinery, mechanical apparatus, means of transport and other such equipment, appliances and tools related to production and business operations and which have a useful life of one year or more. Items which are used for production and business operations but do not have the nature of major equipment, have a unit value of 2000 yuan or less, or have a useful life of 2 years or less, may be itemized as expenses according to actual consumption. (GUO WU YUAN LING [85] 1991.6.30)   4.1.2 The valuation of fixed assets shall be based on original cost. The original cost of purchased fixed assets is the purchase price plus transportation expenses, installation expenses and other related expenses incurred prior to the use of the assets. The original cost of fixed assets manufactured or constructed by […]

3.1 Basic Regulations 3.1.1 For enterprises with foreign investment and foreign enterprises with establishments and sites in China, the amount of taxable income on the total income each year from those establishments and sites, shall be the amount remaining from gross income for that year after costs, expenses and losses have been deducted. (ZHU XI LING [45] 1991.4.9)   3.1.2 The losses incurred in a tax year by an enterprise with foreign investment or by the organizations or sites established by a foreign enterprise in China for production or business operations, may be offset against income in the following tax year. Where the income of the following year is not sufficient to offset those losses, the balance may be offset against income of subsequent years, over a period not exceeding 5 years. (ZHU XI LING [45] 1991.4.9)   3.1.3 Where the financial and accounting principles adopted by an enterprise with […]

2.1 Enterprises with foreign investment which establish their head office in China shall pay Income Tax on the income derived from sources inside and outside China. Foreign enterprises shall pay Income Tax on income derived from sources within China. (GUO WU YUAN LING 1991.6.30)   2.2 ‘Head office’ in Article 3 of the Tax Law refers to the central organization of an enterprise with foreign investment which is organized in China as an enterprise legal person according to the laws of China, and which is responsible for the administration, operation and control of that enterprise. (GUO WU YUAN LING 1991.6.30)   2.3 ‘Income derived from sources inside China’ in Article 3 of the Tax Law refers to: A. Income from production and business operations of enterprises with foreign investment and by foreign enterprises which have established organizations or sites in China, as well as profits (dividends), interest, rental income, royalties […]