How To Register for Income Tax In China
- The person who earns income is the person who pays an individual tax. Likewise, the individual or institution that pays the tax is the taxpayer with the responsibility. Taxpayers who earn income or salary from multiple sources and not having the tax withholder, should prepare return of tax and pay taxes at his expense.
- Tax withholding tax payers who are tax withholders withholding payments and a tax payer who file monthly tax returns should pay the tax to the state Treasury within the first 7 days of the month following and also provide tax authorities with tax return forms.
- Taxes due on wages and salaries must be assessed and collected each month and paid to the Treasury of the State by the tax withholder or the taxpayer within the first 7 days of the month following along with tax returns to tax authorities. Taxes paid on wages and salaries of trades and special industries can be assessed on year-round basis and paid out in monthly advances. The specific regulations for this should be determined through the State Council.
- The tax due on earnings from the business operations of an commercial or industrial business owner should be assessed annually basis, and paid monthly advances from an individual taxpayer in the initial 7 days of the following month and the tax due should be paid by the end in the fiscal year. excess payments refunded and any excess balance paid by additional payments.
- The tax due on the income that is earned through operations contracted or lease from an organization or company should be assessed on a year-to-year basis and then paid through the state’s treasury within 30 days of the end of the fiscal year, along with tax returns submitted by the taxpayer with the tax authorities. Taxpayers who earn revenue from leased or contracted business operations on a variety of times in the course of a year must pay an advance payment within 7 days of the date that an income has been received and pay tax within three months following the end of the year, with the extra payment refunded, and the remaining balance compensated by supplementary payment.
Documents Required Register for Income Tax
- A commercial and industrial license for business or another similar permits for business operation
- An agreement, contract or articles of association
- The unifying organizational code
- A passport, ID card, or other valid ID document from the representative of legal or a responsible owner’s member.
- Other documents and other information requested by tax authorities of an autonomous region, province or municipal directly under the state council. State Council
Office Locations and Contacts
The State Administration of Taxation Address Yangfangdian Road, Haidian District on the 5th
State Administration for Industry and Commerce People’s Republic of China
Address: 8 Sanlihe Donglu, Xichengqu, Beijing, 100820, P. R. China
What Are All The Eligibility
- Earn an annual income of greater than RMB120 000
- Earn revenue through two or more locations within the PRC
- Get income from sources that are not part of the PRC
- Received tax-deductible income for that there is no withholding agent
Other conditions that are regulated in the State Council
The extent to which a tax payer will be subjected to IIT in China depends on the source of income and the time that they spend in China.
The term “China-sourced” income refers to the amount that your employer pays you (both international and domestic) in the time you perform services as part of your job in China. Non-China-sourced income refers to the income you earn when working in a different country than China.
Time Period Expended in China
- If you live in China in less than 90 consecutive days (or 183 days for citizens of countries who are signed into a double-taxation deal with China) either continuously or in a cumulative manner during the course of a calendar year, your sole tax-deductible income is China-sourced income that you earn via you Chinese employer. If you are in China for longer than 90 calendar days (183 days) but not more than one year the entirety of the income you earn from China would be subject to IIT however, you don’t have to pay IIT on earnings derived from out of China.
- Living in China for a calendar year means that during a calendar year, short absences or absences from China are not more than 30 days in a row or 90 days total.
- People who live in China for longer than one year, but not more than five years have to pay IIT on all income that is sourced from China and income derived from foreign sources from a Chinese-based company. Foreigners who have been living in China for longer than 5 years will be taxed on their global income.
- The name and # of ID cards, passports, or any other acceptable ID document from the institution, its legal representative or the owner
- The address of the business or residence
- The kind of registration
- The accounting system
- The type of production and the business operation
- The production scope and operations
- The sum in capital (fund) or investment
- The production term and operation
- The name and phone number of the chief financial officer.
- Other information that is specified in the State Administration of Taxation
The Document is required Register for Income Tax
- The individual income tax an tax that is levied on tax-paying income of individuals (including 11 tax-exempt items like the earnings from wages and salaries earned by individuals, or the earnings from production, operations derived by commercial and industrial households).
- Income tax for individuals (IIT) is typically removed from salaries or wages by employers and is paid to tax authorities on an annual base (within 15 days of the close of the month).
Information that could be helpful
Tax on income earned by individuals should be imposed on the following types of income:
- The income from wages and salaries;
- Earnings from business or production operation , derived by households, both commercial and industrial;
- The income from leases or contracts for operation of companies or institutions;
- Remuneration from personal services;
- Remuneration from the author’s salary;
- Royalties from income;
- The income from dividends, interest and bonuses;
- Rent from a property
- The income from the transfer of property;
- Contingent income; and
- Other income that is tax-deductible by the department of finance from the State Council.
Other uses for the document/certificate
- A person who has a residence in China or who has lived in China for a period of one year or more, but not having any permanent residence therein, must be taxed on their individual income the income earned from outside and within China as per the regulations in the Law.
- A person who does not have residency nor is living in China or is not a resident and who has resided within China in China for less than one year is required to pay tax on individual income earnings earned outside of China as per the requirements in the Law.
- A tax rate that is progressive of 7 levels ranging from 33% to 45% applies to the earnings from wages and salaries. the progressive tax rate of 5 levels, ranging from 5 to 35 percent is applied to profits from business and production and also to the revenue from the lease or contracted operating of businesses or undertakings that are derived by private commercial and industrial households (note that this is also applicable to owners of sole proprietorship companies and partnerships) as well as the flat 20% tax bracket of percent is applied to all other income sources. Since September 1, 2011 when it comes to the earnings from salaries and wages the minimum monthly deduction for expenses will be raised to RMB 2000 and up to RMB 3500.
- The time frame for the payment of the tax on individual income is according to the following: tax taken by the withholding agent on a monthly basis and the tax that is that is to be paid by self-reporting taxpayers on a monthly basis, must be transferred to the treasury of the state in the initial 15-day period of the next month. For the earnings from business or production generated by private commercial and industrial households, tax due is to be calculated on an annually, and the provisoy income tax must be paid out in advance, on a month-to-month schedule, paid and settled.