Quanzhou Taxation Service
Hotline: 86-755-82143348 Email: anitayao@citilinkia.com
Taxation in Quanzhou has undergone tremendous changes in recent years. Currently, there are 24 different types of tax imposed on a wide range of incomes and transactions. Taxpayers can be individuals, entities or economic organizations. To fulfill its WTO commitments, the Chinese government is currently preparing for another round of tax reform, which is expected to take place in 2009. The goals of this reform are to unify current tax laws and to develop a level playing field for domestic enterprises and foreign investment enterprises, to promote the harmonized growth of taxation and the economy, and to improve the efficiency of tax collection and administration.
Keeping place with compliance obligations in such a rapidly changing regulatory environment can be a major challenge. You are advised to seek professional advice regarding your particular circumstances.
Taxation in Quanzhou - Tax Overview
As far as China tax department is concerned, Quanzhou has two functional taxes: national tax and local tax , the former is for national use while the later is for local use.
Tax Return must claim Value Added Tax, Business Tax, Individual Income Tax monthly and Enterprise Income Tax quarterly for the registered sectors to the national or local taxation. Enterprise Income Tax needs to claim final settlement and payment yearly.
The main tax Category to the national taxation is Value Added Tax; Consumption Tax by customs, Enterprise Income Tax, and to the local taxation is Business Tax, Individual Income Tax, Resource Tax, City Maintenance and Construction Tax, House Property Tax, Stamp Duty, Urban and Township Land Use Tax.
Value Added Tax (VAT) is 0-17% for trading and manufacturing sectors; Business Tax (BT) is 3-20% for service sectors, Enterprise Income Tax (EIT) is 25%, and Individual Income Tax (IIT) is 5-45%.
Taxation in Quanzhou - China Tax Category
The China tax could be classified as follows: Value Added Tax (VAT), Business Tax (BT), Enterprise Income Tax (EIT), Individual Income Tax (IIT), Consumption Tax by customs (CT), Resource Tax (RT), City Maintenance and Construction Tax (CMCT), House Property Tax (HPT), Stamp Duty (ST), Urban and Township Land Use Tax (UTLU)
Taxation in Quanzhou - Value Added Tax (VAT)
VAT is levied at a general rate of 17 per cent on all units and individuals engaged in the sale of goods; the provision of processing , repairs and replacement services; and the importation of goods into Quanzhou. A special rate of 13 percent applies to certain items, such as utilities, cereals and edible vegetable oils, animal feed, fertilizers and insecticides. Exported goods are generally zero-rated, but some exceptions apply.
According to the companies of different sizes，the companies can be divided into normal taxpayers and small taxpayers.
1)Normal taxpayers
To compute the VAT payable, the normal taxpayers need to separately calculate the output tax and the input tax for the current period. Then the difference between the output tax and the input tax shall be the actual amount of VAT payable.
The formula for computing the tax payable is as follows:
Tax payable = Output tax payable for the current period - Input tax for the current period
Output tax payable = Sales volume in the current period × Applicable tax rate
2)Small taxpayers
Small taxpayers are taxed on the basis of the revenue derived from sales of goods or provision of taxable services by applying proper rates 3%. The computing formula is:
Tax payable = Sales amount × Applicable rate
3)Importation
The imported goods are taxed on the basis of the composite assessable price by applying the applicable tax rate.
4)VAT refund for exporters
In case of 0% rate applicable to the exported goods, the exporters may apply to the tax authorities for the input tax refund on those goods exported. At present, the refund rates consist of 5%, 6%, 9%, 11%, 13% and 17%.
5)Tax exemptions
The exempted items include: self-produced primary agricultural products sold by agricultural producing units and individuals; imported goods being processed for exportation; the self-use equipment imported out of the total investment for the projects with foreign investment or domestic investment which are encouraged by the State; contraceptive medicines and devices; antique books purchased from the public; instruments and equipment imported for direct use in scientific research, experiment and education; imported materials and equipment granted by foreign governments or international organizations; articles imported directly by organizations for the disabled for exclusive use by the disabled.
Taxation in Quanzhou - Business Tax (BT)
Business tax ranging form 3 percent to 20 percent is levied on various types of services provided, and on the transfer of intangible assets or the sale of immovable properties within Quanzhou. Transportation, construction, post and telecommunication, cultural activities and sports are taxed at 3 percent, while the financial and insurance industries and most services are taxed at 5 percent. The entertainment business, including operation of music halls, ballrooms, karaoke, billiard rooms, golf courses, bowling alleys, recreation rooms and internet cafes, is taxed at between 5percent and 20 percent. Business tax is imposed on gross receipts, including additional fees and charges. Certain services, such as educational, nursing, medical, cultural and agricultural development services, are exempt. The transfer of intangible assets or the sale of immovable properties is subject to business tax of 5percent.
The amount of Business Tax payable is equal to the turnover times the applicable tax rate. The computing formula is:
Tax payable = Turnover × Applicable tax rate
Major Exemptions
Business Tax may be exempt for: nursing services provided by nurseries, kindergartens, old people's homes, welfare institutions for the handicapped, matchmaking and funeral services; services provided individually by the disabled to the public; medical services provided by hospitals, clinics and other medical institutions; educational services provided by schools and other educational institutions, and services provided by students in part-time work; agricultural mechanical ploughing, irrigation and drainage, prevention and treatment of plant diseases and insect pests, plant protection, insurance for farming and animal husbandry, and related technical training services, breeding and the prevention and treatment of diseases of poultry, livestock and aquatic animals; admission fees for cultural activities conducted by memorial hall, museum, cultural centre, art gallery, exhibition hall, academy of painting and calligraphy, library and cultural protective units, admission fees for cultural and religious activities taking place at religious premises.
Contact Us
For further queries, you are welcome to visit ATAHK website www.3737580.net or email to atahkhk@21cn.com / ata-cfmp@hotmail.com or contact any of the following branches, thank you.
HONGKONG TEL:852-27837818 CHINA TEL:86-755-82143272 MALAYSIA TEL:603- 2141 8908 QUANZHOU TEL: 86-595-22515909 22515806 22515809
ATAHK——Global Corporate Solution Provider, Value Investment & Strategic Development.