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China
Foreign Investment Enterprises and Foreign
Enterprises Income Tax |
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Written by: Chan, Wong, Chung & Co.
Forms of Income Tax:
1. Taxpayer
Foreign Investment Enterprises (FIEs) and Foreign Enterprises
(FEs) which have set up establishments or sites in China
and derive income from productions and business operations.
FEs which have not set up any establishments or sites
but derive income from sources in China is also considered
as a taxpayer.
2. Taxation Scope
Taxpayers shall pay income tax on the income from production
and business operations and on other income derived
from sources in China. FIEs which have set up its head
office in China shall pay income tax on both the income
derived from source in and outside China.
"other income" refers to income from profits
(dividends), interest, rentals and assignment of property,
income from provision or assignment of patent right,
proprietary technology, trademarks and copyrights, non-operating
income, etc.
The income derived from source outside China includes
income from production and business operations and other
income derived by branches of FIEs outside China.
3. Tax rate
30% + 3%
the local income tax shall be computed on the amount
of profit at 3% together with the enterprise income
tax computed at 30% of the profit.
20%
FIEs which have not set up establishments or sites in
China derive profits, interest, rentals, royalties and
other income from sources in China. FEs which have set
up establishments or sites in China and derive income
as above, and such income are not connected with their
establishments or sites, such FEs shall pay income tax
on such profit at 20%.
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