Page 35 - Doing Business in China

TAXATION

VEHICLE AND VESSEL USAGE TAX
Owners or managers of vehicles and vessels used within the territory of China are required to pay vehicle and
vessel usage tax� Tax is assessed on net tonnage of the vessel or vehicle, or on a per unit basis�

Assessment and administration
Vehicle and vessel usage tax is assessed on an annual basis with payment to be made together with the
compulsory traffic accident liability insurance for motor vehicles�

CONTRACTUAL TAX (DEED TAX)
Where land use rights or building ownership rights are transferred within China, the transferee enterprises or
individuals have the obligation to pay deed tax� The transfer of land use rights or building ownership rights refers to:
▪ The grant of state-owned land use rights

▪ The transfer of land use rights, including sale, gift or exchange
▪ Buying and selling of buildings

▪ A gift of buildings
▪ The exchange of buildings

a) Tax rates
The deed tax ranges from 3% to 5%, and the actual rates will be determined by the provincial or local
governments�

b) Payment
The obligation of the transferee to pay deed tax arises on the date when the contract for the land use or
building ownership transfer is signed or when the documents for the ownership transfer are obtained�

The transferee is required to file the deed tax return with the local tax authorities within 10 days from the date
of the obligation to pay deed tax� The local tax authorities will set the time limit on when the tax must be paid�
Any late payment will incur a penalty of 0�05% per day on the overdue amount�

VEHICLE PURCHASE TAX
The vehicle purchase tax is levied on taxpayers who purchase automobile, trams, trailers, agricultural transport
vehicles and other taxable vehicles� The vehicle purchase tax is calculated based on the value of the purchase at
a tax rate of 10%� The taxable price refers to the total price paid to the seller by the taxpayers for the purchase of
vehicle and the additional cost (excluding VAT)�

Taxpayers who purchase taxable vehicles shall, within 60 days from the date of purchase, declare and pay tax in
one lump sum�

RESOURCE TAX
The resource (natural resources) tax is levied on enterprises and individuals engaged in the exploitation of mineral
products or production of salt within the territory of China and on waters under the country’s jurisdiction� A
nationwide reform of the resource tax was launched in 2011, changing the tax basis from volume of resources
extracted to selling price for certain categories of taxable resources, e�g�, crude oil, natural gas and coal� For most
other taxable resources, the tax is still calculated based on the volume of products sold or procured, at revised tax
rates� The resource tax is payable to the local authorities at the place of production or exploitation�

Since 1 September 2020, the Resource Tax Laws of PRC has been implemented�

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