What are the requirements of China company taxation?
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For foreign investors would like to start their business in China their main concerns may not be the startup process but the tax requirements after the company registration.
What are the tax rate for a China company. Like most of the companies in overseas, Chian company follows two kinds of taxes, the company profit tax and VAT tax. 25% company profit tax suits all the companies in China no matter which city you register your China company. While VAT tax rate range from 0% to 13%.
To tell which rate of VAT rax suits your company mainly depends on your company type and busienss type. According to tax policy the company can be registerd in two types which are small scale taxpayer and general taxpayer. For a small scale taxpayer the company enjoys 1% VAT tax rate till end of this year according to current tax policy. Please be noted that the company may automatically become a general taxpayer if sales revenue reaches 5 million RMB for 12 consecutive months.
The VAT tax rate 0% to 13% suits a general taxpayer. The trading busienss follows the highest VAT tax rate wth 13%. But please be noted that a general taxpayer can appy VAT tax rebate when doing export trading busienss which a small scale taxpayer do not enjoy this policy. And of course there are some requirements for a company that would like to apply to become a general taxpayer so that they can apply export VAT tax rebate.
Also for tax filing way it is quite different from HK or companies registered overseas. For a China company the tax filing requires to be filed monthly no matter there are business or not. Once the company registered, the monthly tax filing has be to arranged. And at the very begining, a zero tax filing for a newly registered company is acceptable for tax bureau.
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