Value-added Tax
All units and individuals that sell goods, provide labor for processing and repairing, and import goods within the territory of the People’s Republic of China should pay value-added tax according to the regulations.
The base tax rate is 17%; For some goods such as grain, edible vegetable oil, running water, forage, chemical fertilizer, pesticide, farming machines, and so on can be 13%.
Consumption Tax
Producing, processing, and importing of the following 11 commodities in China are subject to consumption tax: tobacco, alcoholic beverages, cosmetics, skin and hair care products, jewelry, fireworks, gasoline, diesel, automobile tires, motorcycles, and or motorcars The consumption tax is calculated in accordance with quantity (e.g. gasoline) or according to the fixed scheduled rates (e.g. the rate for motorcars including its engine cylinder capacity under 2,200ml is 8%).
Business Tax
All units and individuals engaging in transportation, telecommunication, finance and insurance, construction, art, sports, entertainment, social services, transferring intangible assets, and selling real estates are subject to business tax.
Business tax rates are between 3% and 5%. But the tax rate for the entertainment sector is between 5% and 20%.
Personal Income Tax
Employees within the territory of the People’s Republic of China should pay personal income tax for their wages and salaries.
| Taxable monthly income | Tax rate |
|---|---|
| The section less than 500 | 5% |
| The section from 500 to 2,000 | 10% |
| The section from 2,000 to 5,000 | 15% |
| The section from 5,000 to 20,000 | 20% |
| The section from 20,000 to 40,000 | 25% |
| The section from 40,000 to 60,000 | 30% |
| The section from 60,000 to 80,000 | 35% |
| The section from 80,000 to 100,000 | 40% |
| The section exceeding 100,000 | 45% |
According to the sixth article of the Law on Personal Income Tax, for people working in China, the taxable income is the balance of their monthly income after deducting RMB 1,600 yuan. For personnel recruited from outside China, the taxable income is the balance of their monthly income after deducting RMB 3,200 yuan.