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BS EA A GE I AT TE. | Taxation Law Topic 01: Glossary for Taxation Law and the Provisional Part 1 Key Words and Phrases . State Administration for Taxation [la BE 5 445 . Local Taxation bureau jh W884 J . Business Tax ub Bt . Individual Income Tax 4+ ASF 84 . Income Tax for Enterprises duh Dr 4# Bt opens 301vFy Foxit PDF Editor ite > annvnnnan SERIE (©) by Fost 28, 2003-2020 6, tax returns filing 4YBLHIR 7. taxes payable MRR A 8. the assessable period for tax payment BLN 9, the timing of tax liability arising #8455 24E BY fi 10. consolidate reporting FF HIE 11, the local competent tax authority 24 31 BEI-BL3E 12, the outbound business activity Shih 221 a) 13. Tax Inspection Report 44 BERE#EdR H 14, tax avoidance iB) 15, tax evasion i Bi 16. tax base BRE 17. refund after collection S64E/5 18. withhold and remit tax (UHH 19. collect and remit tax (RIUM 20,, income from authors remuneration #iPA/F4 21, income from remuneration for personal service 3755 IR IMT 22. income from lease of property St 74198 Wt 23. income from transfer of property Wtj* ALTE 24.. contingent income (BSR B18. 25. resident BER 26. non-resident 4EJB ER 27. tax year WBE HE 28. temporary trips out of iit} ESR 29. flat rate HABEAS 30. withholding income tax HEHEB), 31, withholding at source R40 32. State Treasury 33. tax preference BLKHLIR 34. the first profit-making year #$—S4R#l ‘FE 35. refund of the income tax paid on the reinvested amount FAL VEEBL 36, export-oriented enterprise 1 0 Hl ¢eiy 37. technologically advanced enterprise Jt HRA: Part 1 Provisional Regulations of the People’s Republic of China on Value Added Tax RRR: Paragraph 1 The Provisional Regulations of the People’s Republic of China on Value-Added Tax Article 1 All units and individuals engaged in the sales of goods, provision of processing, 3020HY Foxit PDF Editor 34% o#=09. exewne BERETA (c) by Foxit 4), 2003 - 2010 RATA repairs and replacement services, and the importation of goods within the territory of the People’s Republic of China are taxpayers of Value-Added Tax » and shall pay VAT in accordance with these Regulations. Article 2. VAT rates: (A)For taxpayers selling or importing goods, other than those stipulated in items (2 and (3) of this Article, the tax rate shall be 17%. (2)For taxpayers selling or importing the following goods, the tax rate shall be 13% (omitting). (3) For taxpayers exporting goods, the tax rate shall be 0%, except as otherwise stipulated by the State Council. (4) For taxpayer providing processing, repairs and replacement, services (hereinafter referred to as “taxable services”), the tax rate shall be 17%, Article 3. Taxpayers dealing in goods or providing taxable services with different tax rates shall be accounted for separately. If the sales amounts have not been accounted for separately, the higher tax rates shall apply. BS notes ® Provisional ES 8) 5 SEA As EH © Value added tax SHB, 5 Ig VAT @ Engage in RFS SM © Repairs and replacement services emiemes @ Territory ce bs OUR: eH © Taxpayer oe BLA RABE: Be @ Account for at BEX: Hae A RR SEAN IP BE AT SE He TEA RSE ATE A ES AIL. IE RESTS AE AGM AI A, ARAN UAB A BT ARCA Se DO I BE HoH MABE. CARLA RRA EE, RARE, SECS) ESP, BEARD 17%. (2) NBER SRA UE PUGET. BEB I 13.%4 CED 6 ONRAHORD, BENE: LE, BFA AAEM. AaB ADE BEIT. PEELS CLF ARM BLY IF), BLE 17%. EA GBA SRA BARBY GR Oy LH EBLE S| MNF A Be EBL SE Ss BY AEA ANCA AAT BL | ASE BO. 303Hy] Foxit PDF Editor Si$6 TORIES prea Foxit Zin], 2003 - 2010 RRR: Paragraph 2 Article 4 Except as stipulated in Article 1lof these Regulations, for taxpayers engaged in the sales of goods or the provision of taxable services (hereinafter referred to as “selling goods or taxable services”), the'tax payable shall be the balance of output tax for the period after deducting the input tax for the period. The formula for computing the tax payable is as follows; Tax payable=Output tax payable for the period—Input tax for the period If the output tax for the period is less than the input tax for the period and insufficient to offset against the input tax for the period, the excess input tax ean be carried forward for set-off in the following periods. Article 6 The sales amount shall be the total consideration and all other charges receivable from the purchasers by the taxpayer selling goods or taxable services, but excluding the output tax collectible. The sales amount shall be computed in renminbi, ‘The sales amount of the taxpayer settled in the currencies other than renminbi shall be converted into renminbi, Article 7 Where the price used by the taxpayer in selling goods or taxable services is obviously low and without proper justification, the sales amount shall be determined by the competent tax authorities, Article 8 For taxpayers who purchase goods or receive taxable services (hereinafter referred to as “purchasing goods or taxable services”), VAT paid or borne shall be the input tax, BS notes ® Output tax HBB @ Input tax EBB © Consideration Xt @ Charges BA © Prevail in AT @ Purchasing goods ERE OD @ Taxable services TBS StRX: DA BRASARLSIS + — ABLE DD, BLA GH He Oa AH GE BEE Se CRE BPR ESE DR ALB IE I) LE 24 BERL A UHRA: 304FY Foxit PDF Editor S33 9: saeamen MELEE (c) by Foxit 2a), 2003 - 2010 2 RAFF DAB A I TL BE — ET BI 4 ET BBL PY DEB BAS AICTE» LAS ALB SY A Le Da eT NAS Be RIT ABE ASN PE G8 By a A INL BE OF 95-1 SY 3 Pa MCI A A Ah FA ASEAN CG CHR BBL. PEA A BGT HESS YB ABL ABR TTT BASE Tei OE A ARAB HR. DR BLA SIEGE iy BR A 1M BE DY I 1 Oh Ale WB A AG I FG TE YH BES PRET EM. SN Se OBE AE ey PARE IATL DY 45 CLA (SUE Sy RB TA BE I 9D SE wR ATES BEL EBL TB BRL: Paragraph 3 Article 10 Input tax of the following items shall not be credited against the output tax; (1) Goods purchased or taxable services used for Non-VAT taxable items; VAT exempt items, collective welfaré or individual consumption; (2) Abnormal losses of goods purchased and related taxable servicess (3) Goods purchased or taxable services that are consumed for work in progress or finished goods of abnormal losses. (A) Self-use consumer goods of the taxpayers provided by the competent authorities of finance and tax under the State Council; (5) Transportation expenses of the goods specified in Items (1) — (4) of this Article and the transportation expenses for selling tax-exempted goods. Article 11 Small-scale taxpayers engaging in selling goods or taxable services shall adopt a simplified method for calculating the tax payable on the basis of the sale amount and the levy rates without credit against input tax. The formula for calculating the tax payable is as follows: Tax payable=Sales amount X Levy rate ‘The criteria for small-scale taxpayers shall be regulated by the competent financial and tax authorities under the State Council. Article 16 For taxpayers concurrently engaging in tax exempt or tax reduction items, the sale amounts for tax exempt or tax reduction items shall be accounted separately. If the sale amounts haye not been separately accounted, no exemption or reduction is allowed. Article 17. , For the taxpayers whose’ sale amounts have not reached the minimum VAT threshold stipulated by the competent financial and tax authorities under the State Council, the VAT shall be exempt, and otherwise, VAT shall be fully computed.and paid according to the provisions of the Regulations, Article 23. The VAT assessable period shall be one day, three days, five days, ten 305Hy Foxit PDF Editor S48 MRAP (c) by Foxit 4a], 2003 - 2010 RAT > days, fifteen days, one month or one quarter. The actual assessable period of the taxpayers DamaiweS shall be determined by the competent tax authorities according to the magnitude of the tax payable of the taxpayer; tax that cannot be assessed in regular periods may be assessed on a transaction-by-transaetion basis, ‘Taxpayers that adopt one month or one quarter as an assessable period shall report and pay tax within fifteen days following the end of the period, If an assessable period of one day, three days». five days, ten days or fifteen days is adopted, the tax shall be prepaid within five days following the end of the period and a monthly return shall be filled with any balance of tax.due settled within fifteen days from the first day of the following month, ‘The cut-off time for the withholding persons to release the tax shall be implemented in accordance with the above-mentioned two paragraphs, SE Notes © Wellare AF @ Work-in-process Ae shh » SEL 15 y WIP ® Small-scale ANSE @ Exempt TERT) BRAY 5. BER SND CBD RRs HH © Levy Aaa ABI) GE We BEAD © Threshold NY IME AE @ Ministry of Finance BOB ® VAT assessable period SIHELBE AY BLS BR © Magnitude Kays BR ® Monthly return A A B#EX: BTR PATA VERB EA RRL PEM, CO FAP ARS BE REBEL EL. SESE BLE OCA A ae ES aE 8 PMB 5 (2) ATE HBL Ke HY MOE By BA FEY MBE I (3) ARTE AB HOPED Bh 5 Pa STIG Pa HE By WN BEE SE OS BEM, BiG AE EMOTE HONEA Es ARB E28 I) A ALE Se AR BEA SUS A IE SE aR H NOBE SE A, SAT BCR ATA CH sim me HRM EM, MAB MOAR. SL Bi AB = SE FE ANSUBNB AGRE th ESF BEML Bids EAP ABLE. BANA BAH BL, BLT NY, A Sh Se BE. WB ITT EL 0 A 3060HY Foxit PDF Editor 34% MRAP (c) by Foxit 4a], 2003 - 2010 D#e—He BAUS RAF RAPA ELE, AAS BE WBE SSAA ABLATED 5 Be AB BESS Se A 1 BI AE OY SACS ELBE | BARE AO, AR HRA BINS A HOTT A I EL HIS MAB MBM 1, 3H. SA, OR, ISA. AR TEBE. PUBL A HALRB Rt SE BES WL SE ALAR ON BEAN BL HE Hy Sb SH Sie 5 ABABA SEIU PRA BLU, PD EAU AN BE SNBLALA LA BR TEBE 1 PB, WS Ae 15 FPR 1 H. 3H. 5 Ay 10 Ray 15 A TB, BS eS A Bia, FUR 1 FUE 15 EPS HRN BLOT A BEAK 0 FUL AA BEC KIL ARC EAT A EIA Topic 02: Provisional Regulations of the People’s Republic of China on Business Tax BLRX: Paragraph 1 Provisional Regulations of the People’s Republie of China on Business Tax Article |All units and individuals engaged in the provision of services as prescribed in these Regulations, the transfer of intangible assets or the sale of immovable properties within the territory of the People's Republic of China shall be taxpayers of Business Tax, and shall pay Business Tax in accordance with these Regulations. Article 3 For taxpayers engaged in taxable activities under different tax items (hereinafter referred to as “taxable services”), the turnover, transfer and sales amounts (hereinafter referred to as “turnover”) under different taxable items shall be accounted for separately, If the turnover has not been accounted for separately, the higher tax rate shall apply. Article 4 For taxpayers providing taxable services, transferring intangible assets or selling immovable properties, the tax payable shall be computed according to the turnover and the prescribed tax rates, The formula for computing the tax payable is as follows: ‘Tax payable = Turnover Tax rate ‘The turnover shall be computed in renminbi, The turnover of the taxpayer settled in the currencies other than renminbi shall be converted into renminbi. BS Notes st 5 RP A 5 PEA @ Business tax Ewe © Taxpayer BBA @ Tax item BE 307VHy Foxit PDF Editor 3 RRIRATE (c) by Foxit 44], 2003 - 2010 DAMS MR MST RHFRA ° © Turnover kw @ Convert into WA d+ BER: PAE A BSE A PS ME BLT AF ie TENE A HEAT SE BE A A EO EL TG TEE BP aR Be HB AR PPR RCANT A. aE BLO MLA CR RAS A i a EE UB. A NBA MEAT AS TTB) (11 SAC Ee BE CE HB I) ELE WEBER A RANT OL PSH AAR TALE LA PLA. EAE AOL CLT fa eS MEAD RAPA BY, SORTER BLAS. SMO UBL ABE EMD BE SF 95, HELL TGF VE P= RAT ANE AR PS HR AR UD AL ATI EO BRA MAB M. MAB RA ‘ LN BL BE SEX BEE ARABS TTT SE. BLA DLA ER TH DA Sb A S2 18 AE-AE PHBE, OM SATA A RT WH. BRL: Paragraph 2 Fetes (lope ae Article 5 The turnover of the taxpayers shall be the total consideration and all other charges receivable for the provision of taxable services, transfer of intangible assets or sales of immovable properties by the taxpayers. Article 9 For taxpayers engaged in tax exempt or tax reduced items, the turnover shall be accounted for separately, If the turnover has not been separately accounted for, no exemption or reduction is allowed, Article 12 The time at which a liability to Business Tax arises shall be the date on which the business proceeds are received or documented evidence of right to collect business proceeds is obtained by the taxpayer in return for providing taxable services, transferring intangible assets or selling non-current assets. Article 15 The Business Tax assessable period shall be five days, ten days, fifteen days, one month or one quarter. The actual assessable period of taxpayers shall be determined by the competent tax authorities according to the magnitude of the tax payable of the taxpayers; tax that cannot be assessed in regular periods may be assessed on a transaction-by-transaction basis. Taxpayers that adopt one month or one quarter as an assessable period shall report and pay tax within fifteen days following the end of the period. If an assessable period of five days, ten days or fifteen days is adopted, the tax shall be prepaid within five days following the end of the period and a monthly tax return shall be filed with any balance of tax due settled within fifteen days from the first day of the following month, 308%Dea Ms FH Foxit PDF Editor Sq Has eneune! KAR ATA (c) by Foxit Zn], 2003 - 2010 BS Notes ® Consideration © Other charges © Tax exempt © Tax reduced @ Proceeds © Competent Competent authority @ Magnitude © Transaction-by-transaction | BtEX: BHA INBLAI EY SERB RAN tS BT AB BEA BE EM BEBE SF. HELL ICE Vi RATHI aot SUMS, Heltah eB ce ee Sh A” BLO BEBE SOBCBOHL: WA, INC WERE» ABE GERARD 4s ET KAN HR EB HY PEAR oh 7 CL DR WAAR, MBA, ME BL LBL A MY Abts A DHA BBN, LG WBE. Re PRBS ANB SS BE my LAE EMBL OF OS ELIE BE A ABP FE WAS EWA RAR A AS EE ICA TL SE a A HE WAS AWARD SAL ION, 15 A. 1 SAMA ERE. BE Af. ON BAIN BBL hy SEP BEG BL SEALE ABA BABE AY AC ly SABE 5 AS He HT SABRE BLAN, AT LAHEY BS. ABA IAA RA 1 TSE MARIA, GH Ae 15 AAR; LS A, 10AR# 15 AH—THBN, BMWZA ES AAW, FRA 1 Ae 15 YEN BLES LE A EBL RK. Topic 03; Individual Income Tax Law of the People’s Republic of China RAL: Paragraph 1 Individual Income Tax Law of the People’s Republic of China Article 1 An individual who has a domicile in the territory of China or who has no domicile but has stayed in the territory of China for one year or more shall pay individual income tax in accordance with the provisions of this Law for his incomes obtained in and/or outside the territory of China, An individual who has no domicile and does not stay in the territory of China or who 3090Hy Foxit PDF Editor 3 wiaceas4 Bod ATT (c) by Foxit 4p], 2003 - 2010 RATA > mo ece nuns satel UE Yeal SiteHt pay individual income tax in accordance with the provisions of this Law for his incomes obtained Dw has no domicile but has stayed in the territory of C in the territory of China, Article 2 Individual incomes set forth below shall be subject to payment of individual income tax: 1, Incomes from wages and salaries; 2, Incomes of private industrial and commercial households from their productions and business operations; 3. Incomes from contracting or leasing enterprises and institutions; 4, Incomes from remuneration for labor services; 5. Incomes from authors’ remuneration; 6. Incomes from royalties; 7. Incomes from interest, stocks dividends and bonuses; 8. Incomes from lease of property; 9, Incomes from transfer of property; 10, Oceasional incomes; and : 11, Other incomes specified as taxable by the department of ‘the State Council for finance, Article 3 Individual income tax rates: 1, Income from wages and salaries that is applicable to, progressive tax rate shall be taxed at rates ranging from 3 percent to 45 percent. 2, Incomes of private industrial and commercial households from. their productions and business operations and incomes from contracting or leasing enterprises and institutions, which is applicable to progressive.tax rate, shall be taxed at the rates ranging from 5 percent to 35 percent, 3. Incomes from authors remuneration that is applicable to flat tax rate shall be taxed at the rate of 20 percent, and 30 percent of taxable income shall be deducted, 4, Incomes from remuneration for labor services that is applicable to the flat tax rate shall be taxed at the rate of 20 percent, If a single payment of remuneration for labor service is excessively high, an additional proportion of tax may be levied thereon, and the specific measures shall be provided by the State Council, 8. Incomes from royalties, incomes from interest, stocks dividend and ‘bonuses, comes from lease of property, incomes from transfer of property, occasional incomes and other incomes, which is applicable to flat tax rate, shall be taxed at the rate of 20 percent. ES notes : @ Individual income tax DADE BL @ Wage Le ® Salary ; Bike 310%HY Foxit PDF Editor 34% sia sneenes KER ATA (c) by Foxit aj], 2003 - 2010 © Private industrial and commercial househol, RAT HR © Contracting Tai © Remuneration tH Authors’ remuneration iM @ Royalties FEVER BE © Dividend I © Bonus SAL @ Progressive tax rate FBR © Flat tax rate HG IBLE BeEX: shee ARSE A SA TAP BB Se CE EA ATT, RAR SGA TATTLE ME ARE TA, SAF LS PS AT SEPIA AY EAE + FRB AR TAL ME A TBE, [HEP BLM PY HG MAR A ST TES LEAR — AEA Bh FRROBTAR, ARC REDE MAT A STAB A PRA, EBL 1, LR. BVT, MRL RG AE. BEAR WM PR A TT SHOT: AEs ERP PE as ALB, WB. SATA STL Bs . APR BTA 10, ERR ATAE s Ll, BES Bele BAB TH se EBL A HAS EK PARAMORE, 1, LH. HOHE, BHARRLCR, MRWNEHLSRASLOTE. 2 MATH AOE, SERRA ES A MRABR, RABAT, BAG BAZHEAAZET EN MHRUBR. 3. RATS, AMBRE, BERHADLoO+, FEMME RDZ=+. 4, IFAS, EMBO, BOW RAL. MST RH A BEA, ATS AT Im ARAN, Bo oh Be Bea 5. PARROTS, AB. RE. AE, PTE, LT. RARBALGHE, GACH, BRWAAZo+. 311dHy Foxit PDF Editor 3 amatmaeMs ARETE (c) by Foxit 4m], 2003 - 2010 RATA BRR: Paragraph 2 Article 6 Calculation of income amount taxable: 1. For income from wages and salaries, the balance after deducting RMB 3, 500 from the monthly revenue shall be the taxable income. 2. For incomes of private industrial and commercial houscholds from their productions and business operations, the income amount taxable shall be the remainder after deducting costs, expenses and losses from the gross incomes in a tax year, 3. For incomes from contracting or leasing enterprises and institutions, the income amount taxable shall be the remainder after deducting necessary expenses from the gross income in a tax year, 4, For incomes from remuneration for labor services, incomes from authors’ remuneration, incomes from royalties and incomes from lease of property, the income amount taxable shall be the remainder after deducting RMB 800 if a single payment does not exceed RMB 4, 000; and be the remainder after deducting 20 percent for expense: single payment exceeds RMB 4, 000, 5. For incomes from transfer of property, the income amount taxable shall be the remainder after deducting the original value of the property and reasonable expenses from proceeds of the transfer of property. . 6. For incomes from interest, stocks dividends and bonuses, occasional incomes and other incomes, the income amount taxable shall be the amount of income received each time. : The part of income donated by the individuals into education and other public welfare causes shall be deducted from the income amount taxable in accordance with the relevant regulations of the State Council. For a taxpayer who has no domicile in the territory of China but has obtained incomes from wages and salaries in the territory of China, or for @ taxpayer who has a domicile in the territory of China but has obtained wage and salary incomes from abroad, an additional deduction for expenses may be determined according to his average income level, living standard and the change of exchange rates, and the scope and standard for the additional deduction for expenses shall be provided for by the State Council. Article 8 The income earner shall be the taxpayer of individual income tax and the unit or person that effects the payment shall be the withholding agent. Where the individual income exceeds the amount as prescribed by the State Council, where a,taxpayer has wage or salary incomes from two or more places or has no withholding agent, or where there is any other circumstance as prescribed by the State Council, the taxpayer shall handle the tax payment declaration according to the provisions of the state. A withholding agent shall, according to the provisions of the state, make the withholding declaration for 3120FH Foxit PDF Editor Sq Ose=e9 savune: BAR ATA (c) by Foxit 4a], 2003 - 2010 all the taxpayers and in full amount, RATHI Acticle 11 A service fee equivalent to 2 percent of the amount of tax withheld shall be paid to the withholding agent. BS notes © Remainder © Occasional income ® Donate © Public welfare © Domicile @ Territory @ Withholding agent © Tax payment declaration BiDARD, HAMA MS BAER: ASCE, HSA (ADE s ARATE EES Bi, GU: WE; Aha FUN A ABE AR FOB AR © Withholding declaration BEX: BAR MABE MWR: 1, LH. HAHA, DEAKARMRRTST RATS, Hy AB DT 2. (MARIA AE eT, DL BEE BE HC A A AS RABORB, AMA BN 3. WER ROE E. RABE, UE — BE ERA RL. WBS BRA WR, RAB TR 4, SSH, RATS. SPRUE ALTE. UP RTE, Bok ART TES, MRR Gs TCU, BRAS O TH, He NR TA 5. EPL OES, DE LEIAT™ AO UC A LOR RA A A A, BTM 6. FALL. IBA, LAURA 5 ALS TA AEA A 5 BA Ue A BT A. AAS STAR OT BPE BE ANSE A 2 28 SEA UAB 5 HR D9 Bic AT SE ME BL Site PFO. SAE SE A A TT BE LE Be TS BE SE ETE P PG TBE, HAA LA, ALARA AR AR HB 2K SBA Be 36 BE 44 FE BAS Fe PAL ASH FF 9 A ME SSE NE BN PABEBL, TBAB A, DISCS BT AE ALR EA ATL BAo PARA Ss BEM ERM, AERIAL LIA TBE, Bie TA aR a A SE AG VA Be LAE EB Be BIN EAA A TB 5 BN AN 2 Be Ul BR a fH GR. SMBS AY Be IR FE BEL AB. BAR MALS ABR TR BL, AAS EER 313V