China Company Taxation Plan Service
Hotline: 86-755-82148419 Email: susiehu@citilinkia.com
How many types of tax to pay for a company in China ?
There are about 4 types of taxes for Companies in the current system:
• Value-added tax (VAT)
• Value-added tax surcharge .
• Enterprise profit tax.
• Individual income tax.
Value-added tax (VAT)
Most countries charge Value Added Tax on products and services sold, imported, etc,China,different from progressive and modern country, has a different rates of VAT tax on different companies, the differences are as follow:
1- General VAT payers who conduct VAT taxable sales or import goods, the general tax rate is 13% and 6%, which based on the sales income
2- Small-scale VAT taxpayers is 3%. based on the sales income.
Value-added tax surcharge
Value-added tax surcharge usually includes urban construction tax, education fee surcharge, local education fee surcharge, etc.
Company income tax
Company income tax is a kind of income tax levied on the production and operation income and other income of enterprises and other organizations that obtain income in China.
Company income tax has different rates to different enterprises.
• Basic rate: 25%. This rate is according to the Article 4 of Enterprise income tax law of the People's Republic of China.
• Benefit rate: 20%.
From 1st January, 2019 to 31st December, 2021，
1- SME Company , Yearly profit less than 1000,000rmb ,there will be a 20% reduction of the 25% tax rate, which means the tax rate is only 5%. profit tax is 5%of the profit .
2- SME company, yearly profit over 1000,000 but less than 3000,000rmb , there will be a 20% reduction of the 50% tax rate, which means the tax rate is only 10%. profit tax is 10%of the profit
SME company refers to:
Companies are engaged in industries that not restricted or prohibited by the country and meet the following three conditions:
1- The company's annual taxable profit shall not be over 3 million RMB.
2- The company has no more than 300 employees.
3- The total assets of the company is less than 50 million RMB, regardless of the collection method by audit or by verification.
Individual income tax
Individual income tax is a kind of income tax levied by the country on the income of its own citizens, individuals residing within the territory of its own country and individuals abroad from its own country.
Taxpayers of individual income tax include both resident taxpayers and non-resident taxpayers, they have different tax rates.
Resident taxpayers, who are obliged to pay tax in full, must pay individual income tax on all their income derived from sources inside or outside China. It is calculated on the basis of monthly pre-payment and annual accumulation.
Non-resident taxpayers only pay individual income tax on their income derived from within the territory of China. It is calculated and paid on a monthly basis.
Foreigners who stay in China more than 183 days in a year will be consider as Resident taxpayers.
Contact Us
For further inquiries about investment in China, please do not hesitate to contact us at anytime anywhere by simply calling China hotline at 86-755-82148419, or emailing to susiehu@citilinkia.com.You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.