China company taxation (RO) refers to the taxation for representative office in China. A Representative Office (RO) in China is an office established by a foreign company doing business in China to conduct marketing and other non-transactional operations, not for profit seeking activities. It is a good way for foreign investors since no paid up capital and the easy process, if you just want to increase your china supplier or customer relations quickly.
Function of Representative Office in China
1. It can handle market research, quality control for parent company in China, liaison with customers and suppliers, keep good relationship with them;
2. It cannot enter into sales and purchase contracts from China supplier and customer, can not generate income or issue invoices;
3. A China RO can open bank accounts in China for receiving operation fund from foreign company and employ staff for above- mentioned purposes;
4. Apply for China work permit and work residence permit for foreign staff;
5. A RO can not conduct business but still subject to tax liability.
Taxation for Representative Office in China
1. Individual Income Tax (IIT)
All the staff in China RO is subject to individual income tax. Individual Income Tax which rates from 5% to 45% based on salary income exceeding more than RMB3500 for local staff and RMB 4800 for overseas staff.
2. Value-added Tax (VAT)
Value added tax which is based on monthly business total operational expense, the rough rate is 3% or 6% based on your expenses. It is calculated according to the formula like this: VAT= expenses/ (1-15%) ×3% (for small scale tax payer) or VAT= expenses/ (1-15%) ×6% (for general tax payer).
3. Corporate Income Tax (CIT)
Corporate income tax which is based on quarterly business total operational expenses, the rate is 25% as well as other type of business. It is calculated according to the formula: CIT = expenses/ (1-15%) ×20%(deem profit)×25%.
Tannet’s Accounting and Taxation Services
Tannet’s accounting and taxation services include but are not limited to the below:
1. Full monthly bookkeeping;
2. Preparation and submission of accounting and tax filing reports;
3. Tax planning services;
4. Preparation and compilation of reports for the parent company in required format;
5. Representing clients in tax authorities, foundations, other institutions and organizations if required.
Contact Us
If you have any questions about living, working or doing business in China, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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