China Value Added Tax & Consumption Tax

China Taxation Services
Hotline: 86-755-82143422, Email:anitayao@citilinkia.com

Value Added Tax

The value added tax ("VAT") is imposed on the entity and individual engaged in marketing goods, providing processing, repair or replacements services or importing goods within China. The VAT taxpayer is classified into the general taxpayer and the small-scale taxpayer. As for the general taxpayer, the VAT is imposed on the increment value of its sale (or import) of goods or provision of processing, repair and/or replacements services, the basic tax rate is 17%, the lower tax rate is 13%, and the tax rate for export goods is 0; as for the small-scale taxpayer, a simplified system of computation of tax payable is applied, and the rate is 3%. Generally, the prescribed time limit for paying VAT is 1 month. In addition, based on the amount of VAT payable by the taxpayer, there are other six types of the prescribed time limit for paying VAT, i.e. 1 day, 3 days, 5 days, 10 days, 15 days and 1 quarter, of which the prescribed time limit of 1 quarter only applies to the small-scale taxpayer. The taxpayer shall file tax returns within the period from the 1st day to the 15th day of the next month, and in case tax cannot be paid on the basis of the time limit, the taxpayer may pay tax on each transaction.

Consumption Tax
The consumption tax is imposed on the entity and individual engaged in producing, consigned processing, or importing taxable consumer goods within China. The taxation scope covers 14 tax items such as tobacco, alcoholic drinks and alcohol, cosmetics, jewelry and precious stones. The consumption tax payable is assessed respectively under the rate on value method or the amount on volume method on the basis of the volume of sales or the quantity of sales in respect of the taxable consumer goods, in accordance with the tax items specified by the tax laws. The prescribed time limit for paying consumption tax is the same as that for VAT.

Contact us
For further queries, please do not hesitate to contact ATAHK at anytime, anywhere by simply calling China hotline at 86-755-82143422, 86-755-82143512, or emailing to anitayao@citilinkia.com.