China corporate income tax (CIT) is a tax imposed on income derived from production activities and business operations by enterprises within China and other organizations. All enterprises (except sole proprietorship and partnerships), including all organizations that generate income in China, are subject to CIT. Taxpayers of corporate income tax shall pay the tax in accordance with related laws and regulations of the People's Republic of China, except for sole proprietorship and partnership. Below is a a guide to corporate income tax in China.
Who are subject to Corporate Income Tax in China?
1. The companies within China and the profit organizations are the taxpayer of company income tax.
2. Companies were distinguished Resident company from Non-resident company.
3. Resident company is the company which enrolled in People's Republic of China and enrolled in other country but the management organization is in China.
4. Non-resident company is the company which enrolled in other country and the management organization is not in China, but has establishments or places within China. Or else, it doesn't have establishments or places in China but there are some profits derived from sources within China.
What kind of profits should be taxed?
Resident company should be taxed on their profits derived from sources within or out of China.
Non-resident company which has establishments or places in China should be taxed the corporate income tax on their profits derived from the establishments or places in China, and the profits doesn't derived from China but have relationship with the establishments or places in China should also be taxed. The companies which doesn't have establishments or places in China and have establishments or places in China but their profits doesn't have relationship with the establishments or places should be taxed the corporate income tax on their profits derived from sources within China.
What is the tax rate of Corporate Income Tax?
1. Ordinary company: 25%
2. Special Support High-Technology Advanced company: 15%
3. Mini-type Small Profit company: 20%
(1) Manufacturing: Annual Taxable Profits less than RMB1,000,000, Number of Staff less than 100, Asset Amount less than RMB30,000,000;
(2) Non-manufacturing: Annual Taxable Profits less than RMB1,000,000, Number of Staff less than 80, Asset Amount less than RMB10,000,000.
Tannet’s finance and tax team is led by competent domestic CPA who are able to give you professional tax and financial solutions according to your actual situation. Tax in China is complicated to those who are new to the Chinese market. Therefore, you are highly recommended to work with an reliable agency who will take care of the whole issues so that you can focus on the business development.
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