How To Register for Preferential Tax In China
- Individuals and private commercial and industrial entities must submit an application for tax registration to the authority in the place in which their commercial and industrial administration registrations are issued to obtain tax registration for the beginning of businesses; all other taxpayers must first submit an application for tax registration at the Tax Registration Center (2nd Floor Building No. 1. Lane 1060 Lujiabang Road) to get the approval of tax unit administration. They will then be issued tax unit admin approval slips. Then, they must submit an application to the designated tax authority to register for tax when they begin business on receipt of Tax Unit Administration approval slips.
- The principal substance of the tax registration certificate should comprise names of the tax payer and tax registration number and the name of the legal representative or the responsible member, the address of the manufacturing or business site and the registration type the form of accounting the scope of production as well as the business (main line and sides lines) and the date of the certification, as well as the effective duration of the certificate of the tax registration certificate, etc.
Documents that are required Register for Preferential Tax
- A commercial and industrial license for business or another similar business permit
- An agreement, contract or articles of association
- The unifying organizational code
- A passport, ID card or any other valid ID document from the representative of legal or the responsible owner’s representative.
- Other documents and other information requested by tax authorities of the autonomous region, province or municipal directly under the state council. State Council
Office Locations and Contacts
Address of the State Administration for Taxation Yangfangdian Road, Haidian District 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
Joint ventures (JVs) as well as wholly-owned foreign companies (WOFEs) and representative offices and other similar organisations in China must register at the local tax authority within the period stipulated in the applicable regulations. The registration process must complete within 30 calendar days following the issue of the business license.
- Registration documents must be submitted to the local branch from Chinas State Taxation Administration and the local government Taxation Administration office. Both administrations have individual tax authorities. In order to be considered an average Value Added Tax (VAT) taxpayer and be able send VAT-related invoices the taxpayer must register for VAT and VAT registration.
- After completing the tax registration process, the tax payer will receive an tax registration certificate which is required to be renewed each year. Any modifications in the operating licenses or business licenses require the taxpayer to renew their registration with tax authorities.
- China has three types of income taxation including Enterprise Income Tax, Foreign Invested Enterprise, Foreign Enterprise Income Tax, and Individual Income Tax.
- According to the Public Welfare Donations Law, the state supports the creation of public benefit companies and provides support and preference to public benefit social organisations as well as public benefit nonprofit organizations. The law grants benefits related to Enterprise Income Tax (Article 24) as well as individual income Tax (Article 25) and VAT and import duties (Article 26) The specifics of the exemptions are laid out in various statutes and rules.
- The name and identification number on the passport, ID card, or any other acceptable ID document from the institution, its legal representative or the owner
- The address for your business or home
- The kind of registration
- The accounting system
- The type of production and the business operation
- The production scope and the scope of operation
- The sum in capital (fund) or investment
- The production term and operation
- The name and number of the chief financial officer.
- Other information as specified in the State Administration of Taxation
Need to have the Document
The Chinese government charges a small taxes on businesses that have foreign investments and tax incentives are available to those areas and sectors where investing is supported by the government.
Information that could be helpful
- Rate of tax on income Tax on income for companies with foreign investments is charged at a amount of 33 per cent. The tax on income for companies that are foreign-owned and situated within special economic zones state-ownedand high-tech industrial zones, as well as zones for technological and economic development is charged at a amount of 15. The income tax for manufacturing companies that have foreign investments situated in open economic zones along the coast and special economic zones as well as in the former urban districts of cities in which zones of technological and economic development are located is imposed at a level of 24 percent. The income tax for businesses with foreign investment who are involved in projects like ports, communications, energy and dock is charged at a reduced rate of 15 %.
- Reduced tax and exempt: Production companies with foreign investments that have an operating period of more than 10 years will, starting at the time they begin making a profit, be exempted from taxation on income during the initial two years. They will also be given a 50 percent reduction for the next three years. Foreign investment-based enterprises that are involved in forestry, agriculture, as well as animal husbandry as well as businesses with foreign investment based in underdeveloped and remote areas could, subject to approval through the State Bureau of Taxation, be granted an amount of 15-30 percent reduction in the tax rate of tax on income for a period of ten years following the expiration date of the Five-Year period that exempts tax and reduces it mentioned in the preceding paragraph. The tax on income of enterprises that have foreign investments located in the midwest region of China which are involved in projects supported by the government should be assessed at a reduced percentage of 15 per cent for a time of three additional years following the expiration of the five-year tax exemption period and reduction. Foreign-invested enterprises that make use of advanced technology will be exempt from taxation during the initial two years, and permitted a reduction of 50% over the next six years. Alongside the tax exemption for two years and tax reductions for three years companies that are foreign-invested and that produce for export are permitted a lower tax rate of 50 percent so they have an annual export that is 70% or more of their sales. Foreign investors of an enterprise that has foreign investment that reinvests its portion of the profits from the business in a project that has an operating time of no less than five years will be granted being approved from the State Bureau of Taxation of an application made from the investment investor receive 40 % of tax that was already paid in the reinvested sum.
- Since January 1 1994 since January 1, 1994, the Chinese government has imposed a unified value-added tax consumption tax, business tax and tax on companies with foreign investments as well as domestic enterprises. Technological development and transfer by foreign-owned enterprises as well as enterprises with foreign investment are exempt from the value-added tax in order to increase domestic demand and encourage technological improvement in foreign-invested firms. Foreign-invested firms involved in projects that fall within the categories of restricted-B or encouraged the value-added tax on equipment manufactured in China purchased by the companies within the amount of their investment will be refunded in full in the event that the equipment is listed under the catalog that is available with exemption from income tax.
Value-added Tax at the Import-Stage
- Tariff rate: Since 1992, in 1992 the Chinese government has cut the tariff rate by nine times for imports of goods. The current average rate of tariffs is 12 percent.
- Tax exemptions for equipment imported Equipment that is imported to support projects with domestic or foreign investment that are supported and encouraged by the state will be granted the benefit of tariff and value-added tax at import stage exemption.
Other uses for the document/certificate
China’s ever-changing corporate and personal tax regulations make regular tax planning an integral part of conducting businesses in China. Tax incentives are among the primary factors foreign investors must take into consideration when deciding whether or not investing in China.