China Taxation Services
Hotline: 86-755-82143422, Email:anitayao@citilinkia.com
Tax on the other units and organizations with operating income
1) The social organizations and public institutions responsible for its own income and expenditure and practicing enterprise management shall pay income tax locally for their production and operating income and other income.
2) The other social organizations and public institutions shall pay income tax as required for their production and operating income and other income.
Tax on affiliated enterprises
1) Before distributing profit， the affiliated enterprises shall pay income tax locally for their production and operating income. The losses of affiliated enterprises shall be offset by them in accordance with relevant provisions.
2) With respect to the after-tax profit distributed by an affiliated enterprise to its investor， if the investor's business income tax rate is lower than that of the affiliated enterprise， the income tax paid shall not be refunded； if the investor's business income tax rate is higher than that of the affiliated enterprise， the investor shall pay income tax for the distributed after-tax profit. The computing formulae of additional income tax are as follows：
2.1) Taxable income from the affiliated enterprise = profit distributed to the investor÷（1-income tax rate of the affiliated enterprise）
2.2) Income tax payable = taxable income from the affiliated enterprise × tax rate applicable to the investor
2.3) Tax deduction = taxable income from the affiliated enterprise × income tax rate of the affiliated enterprise
2.4) Additional income tax = income tax payable - tax deduction
2.5). Enterprises may adjust tax payment for the dividends and bonuses from investment by reference to the provisions on the affiliated enterprises.
2.6). The income tax on the affiliated enterprises and joint-stock enterprises formed by central and local enterprises public institutions shall be imposed by central tax bureaus and their directly-controlled institutions. The income tax on the affiliated enterprises and joint-stock enterprises formed by local enterprises and public institutions shall be imposed by local tax bureaus.
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.