People's Republic of China Tax Guide
Tax Rate:
25%
15% only applies to Chinese enterprises with “New and High Technology” status or to enterprises operating in the western region of China
Holding Rules:
Dividend distribution from a resident of People’s Republic of China enterprise to another PRC resident enterprise is exempt from Corporate Income Tax.
Dividend distribution from a non-resident entity to a PRC resident entity is subject to Corporate Income Tax (25%). However, foreign tax credits may be available.
Capital gains derived by a PRC resident enterprise are subject to Corporate Income Tax (25%). No exemption for PRC.
Tax Losses:
Enterprises may carry tax losses forward for 5 years. No carry-back is allowed.
Income Tax Treaties for the Avoidance of Double Taxation
Australia
Canada
Hong Kong
India
Indonesia
Japan
Korea
Macau
Malaysia
Philippines
Singapore
Thailand
Find the full list at http://www.ird.gov.hk/eng/tax/dta_inc.htm
Indirect Taxes
Value Added Tax (VAT)
VAT is imposed on sales of goods and maintenance/repair services on movable goods.
VAT Rate:
17%
13% reduced rate may be available for sales of certain goods
Exports attract a zero rate of VAT. A refund of input VAT incurred on materials purchased do- mestically for the export of goods is available and varies from 0% – 17%.
A full refund of input VAT is not available for certain products.
VAT returns are usually led on a calendar month basis.
Personal Taxation Individual Income Tax
Top Rate: The top rate for individuals’ employment income is 45% (for salary income of greater than RMB 80,000)
The tax rates depend on the source of income.