All you need to know about Corporate tax in china

If you intend to do business in China, you need to know what taxes apply. While it is essential to get personalized advice in all tax-related matters, you can make progress with this guide to Chinese corporate tax, VAT, profit in China and business tax on foreign services in China and Corporate tax in china.

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Chinese tax system

Before you decide to do business in China, it is worth taking the time to understand the Chinese tax system. There is a good chance that the tax structure in China will not work the way you are used to. In addition to the different tax rates to consider, some known taxes work differently in China and may instead apply other unknown charges to your income or sales.

The actual tax you end up paying for your business—whether you run a WFOE, joint venture, or any other type of entity—will depend on the specifics of your situation. The type of goods or services you sell, the size of your organization and where in the country you are located can all make a difference. In addition to a range of taxes to be aware of, there are also state and regional incentives, including tax cuts and exemptions for certain businesses, that you should investigate.

We’ll get into some common Chinese trade taxes shortly. First, let’s take a look at an overview of the Chinese tax system. PWC, a global accounting and consulting firm, divides the main types of taxes that may be applicable in China into the following categories:

• Income tax such as corporate
• personal income tax.
• Sales tax including VAT 
• consumption tax and business tax
• real estate tax
• Conduct tax applied to owning a vehicle or receiving certain documents
• Customs Taxes on Imported Goods
• Taxes from the Ministry of Finance on the purchase of land and buildings
• Specific taxes on resources and increase in land value

One thing you may notice is that there is no capital gains tax for China. Capital gains tax – known in many other countries – is not specifically distributed under the Chinese tax rules. Instead, the profits would be taxed in the same way as other relevant business income, or in one of the other tax categories, if applicable then get advice from Moore MS Advisory . For example, land gains tax would apply if you sell land for a profit – even without a separate capital gains tax law.