China taxation needs to be mastered doing business in China
China taxation needs to be mastered doing business in China.
One important reason is that committing tax offences or non-compliance will sometimes be heavily penalized under China tax laws, rules and regulations; and, under China criminal laws.
For instance, when a taxpayer engages in any of the following activities to avoid paying tax or to pay less than the full tax due, he is guilty of tax evasion:
- Forging, altering, concealing or destroying accounting books or supporting vouchers for the accounts.
- Overstating expenses in accounting books; or, understating or failing to state income.
- Failing to file returns after being notified by the tax department to file a report.
When taxpayers are guilty of tax evasion, the tax bureau shall pursue the payment of tax due, and shall impose a fine not exceeding 500% of the tax due.
In addition,
- In case when the tax due accounts for 10% to 30% of the total tax payable, and exceeds RMB10,000 but less than RMB100,000, the taxpayer may be sentenced to a term of imprisonment not exceeding 3 years.
- In case when the tax due accounts for more than 30% of the total tax payable, and exceeds RMB100,000, the taxpayer may be sentenced to a term of imprisonment of 3 to 7 years.
Below are tax types that enterprises must observe in doing business in China:
Turnover Tax
- Value Added Tax
- Consumption Tax
- Business Tax
- Custom Duty
Income Tax
- Enterprise Income Tax
- Individual Income Tax
Resource Tax
- Resource Tax
- City and Township Land Use Tax
Special Purpose Tax
- City Maintenance and Construction Tax
- Land Appreciation Tax
- Vehicle Acquisition Tax
Property and Behavioral Tax
- House Property Tax
- City Real Estate Tax
- Vehicle and Vessel Usage Tax
- Stamp Tax
- Deed tax
Does this list look familiar to you? We hope so. If not, you probably need some China taxation services.
Innocent is no excuse in China
Some of these tax items may not look familiar to you. Yet innocent is no excuse in China. Taxpayers have to identify tax liabilities and report to State tax bureau or Local tax bureau directly. Most companies that we encountered have the same fundamental problem. They do not know that they have the issues. It will be too late if the tax and government officers reveal the issues which can be detrimental to your business. For instance,
- Do you know that you need to pay stamp duty on purchase and sale contracts for both parties to contract?
- Do you know that an individual leasing a property in China needs to pay business tax, house property tax, individual income tax and stamp tax?
- Do you know that you need to withhold business tax even for your part-time service providers like cleaning amah? What are the exceptions?
- Do you know that China tax law has some tax concessions on individual income tax for year end bonus?
- Do you know the rules for foreigners to qualify for income from sources outside China for paying individual income tax in China?
Do you still think that you can employ an administration assistant to answer these China taxation questions? We hope that you will not repeat the mistakes...
Please contact us if you look for professional China taxation services
From China taxation services page back to business services for China page
Disclaimer |
Privacy |
Contact us |
Site Search
|
