Page 23 - Doing Business in China

TAXATION

“In recent years, China’s tax authorities have optimised the tax environment by upgrading tax
regulations into tax laws, and constantly improving tax administration, such as streamlining the
procedure for tax approval matters, and strengthening cooperation with the Administration of
Market Regulation, Customs and Banks to avoid duplicate submissions and reduce approval time.
The tax authorities also introduced tax incentive policies to expand domestic demand and promote
technology innovation in the post-Covid economy. It is expected that further methods, such as
empowering tax governance by digital means and improving tax administration with intelligent
technology, will be taken to continuously optimise the tax business environment in China.”

Kerry, Partner, Tax & Business Advisory

OVERVIEW OF CHINA TAX

TYPES OF TAXES
In general, taxes in China are categorised as follows:

Taxes on turnover or revenue:
▪ Value added tax (VAT)
▪ VAT surcharges (City maintenance and
construction tax and education surcharge)
▪ Consumption tax (CT)
▪ Customs duty

Taxes on income:
▪ Enterprise income tax (EIT)
▪ Individual income tax (IIT)

Taxes on property:
▪ Real estate tax
▪ Vehicle and vessel usage tax
▪ Contractual tax (Deed tax)
▪ Vehicle purchase tax

Taxes on natural resources:
▪ Resource tax
▪ Environmental protection tax
▪ Tobacco tax
▪ Urban land use tax

Taxes on transactions:
▪ Stamp duty tax
▪ Farmland conversion tax
▪ Tonnage tax
▪ Land value-added tax

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