2. Value Added Tax, Consumption Tax and Business Tax
(1) Value Added Tax
Enterprises or individuals who sell commodities, engage in repair and maintenance or import and export business in the territory of China are subject to value added tax in line with Chinese laws. The standard rate for value added tax is 17%, but the rate for a few commodities such as grain, cooking oil, running water, forage, fertilizer, pesticide, and farming machinery is 13%
(2) Consumption Tax
Product, processing and importation of the following 11 commodities in the
Territory of China are subject to consumption tax: tabacco, alcoholic drinks or alcohol, cosmetics, skin and hair care products, jewellery, fireworks, gasoline, diesel, automobile tyre, motorcycle and motorcar. Consumption tax is calculated in two ways. One way is to calculate according to quantity (gasoline is RMB 0.20 per litre). The other is to set tax rate according to the price of commodities (the rate for motorcar with its engine cylinder capacity under 2,200ml is 8%).
(3) Business Tax
Enterprises or individuals whose businesses are in the sectors of transportation, post and telecommunication, finance and insurance, construction, art, sports, entertainment, and services, or who transfer incorporeal properties, sell immovables in the territory of China are subject to business tax. Business tax rate is 3% or 5%, but the tax rate for entertainment sector is 10% or 15%.
3. Stamp Tax
Activities involving purchases and sales, processing, contracting, leasing,
transportation, storage, loan lending, property insurance, technology contract and property transfer vouchers, business account books and licenses are subject to stamp tax. The minimum rate of a stamp tax is 0.005% and the maximum is 0.1%. For licenses and business account books (not including the account books for stating funds), stamps shall be sticked on to each pieces. The price is RMB 5 a piece.
4. City Real Estate Tax
The tax is levied at an annual rate of 1.2% on the original value of the real estate, after 20% is deducted therefrom. The tax rate is 12% if it is levied on the rental income. The newly constructed houses, which are built by the relevant foreign-invested enterprises themselves or purchased by the relevant foreign-invested enterprises in Pudong New Area and Economic and Technological Development Zones, shall be exempt from real estate tax for 5 years as of the month of completion of construction or purchase.
5. Vehicle and Vessel Licence Tax
All the vehicles owned and used by foreign invested enterprises are subject to this tax according to "The Interim Regulations on the Vehicles and Vessels Operation Licence Tax". The tax rates are as follows:
The Tax Rates of Vehicles and Vessel Licence
Catepory |
Type |
Unit |
Anual Tax yable |
Motor Vehicles |
Passenger Cars |
Vehicle |
RMB320 |
Trucks |
Ton |
RMB60 |
Motorcycle |
2wheels |
Vehicle |
RMB60 |
3wheels |
Vehicle |
RMB80 |
Light-Duty Motorcycle |
Vehicle |
RMB20 |
Temporary Licence |
Ten days constitute a session. For each session at 3% of the tax of the said cehicle.
If it is used for less than 10 days, it is regarded as 10 days . |
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