A Wholly
Foreign Owned Enterprise (WFOE) is a Limited Liability Company
established in China by foreign investor(s). A WFOE is very
much like a LLC in the USA that it requires one member only. More
Representative
Offices are also liable for Business Tax and Enterprise
Income Tax. However, a RO could be exempted if its parent company
is in the manufacturing business. More
Any individual who has domicile
in China or who has no domicile in China but has resided in
China for one year or more shall pay Individual
Income Tax on his world-wide income. More
CHINA CORPORATE INCOME TAX
CHINA TAXATION SYSTEM Customs Duties
(1) Duty payers
The payers of Customs Duties include consignees who import goods
permitted by China and consignors who export goods permitted
by China, the former shall pay import duties and the latter
shall pay export duties.
(2) Tariff rates
The tariff rates include import duty rates and export duty rates.
The tariff rates for imports fall into two categories; general
tariff rates and preferential tariff rates. The general tariff
rates apply to the imports originating in the countries with
which the People's Republic of China has not concluded most-favoured-nation
trade agreements; the preferential tariff rates apply to imports
originating in the countries with which the People's Republic
of China has concluded most-favoured-nation trade agreements.
In 1999, there are 6, 940 tariff numbers for imported goods
in the Classifications.
The general tariff rates for importation
range from 0%, 8% to 270% with over 20 different rates. The
preferential tariff rates vary from 0% , 1 % to 121.6% with
over 50 different rates, and the arithmetic average rate is
16.8%. A small number of imported goods are subject to duties
on quantity, compound, or sliding basis. There are 36 tariff
numbers for exported goods subject to Duties with 5 differential
rates ranging from 20% to 50%.
(3) Computation of duty payable
Customs Duty is computed either on ad valorem basis and by applying
an applicable rate or on quantity basis and by applying amount
of duty per unit.
The formula is:
a. Duty payable = Quantity of imported/exported goods ×
Tax-inclusive price × Rate
or
b. Duty payable = Quantity of imported/exported goods ×Amount
of duty per unit
(4) Major reductions and exemptions
a. The following goods may be exempted from Customs Duties upon
verification by the Customs: the duty amount to be paid for
one consignment of goods below RMB 10 yuan; advertising matter
and trade samples of no commercial value; goods gifted by international
organizations or foreign governments; and fuels, stores and
beverages loaded on a means of conveyance entering or leaving
the country for use en route.
b. Duty reduction or exemption shall be given to goods and articles
specified as duty reduction or exemption items by international
treaties to which the People's Republic of China is either a
contracting or an acceding party.
c. Raw materials, subsidiary materials parts, accessories, components
and packing materials imported for overseas businesses to process,
assemble or produce export-oriented products shall be exempt
from duties on the part of actually processed and exported;
or duties are collected first on the imported materials and
parts and then refunded on the basis of the completed products
actually processed and exported.
Hong Kong Head Office
Room 803, Futura Plaza, 111 How Ming Street, Kwun Tong, Hong Kong
TEL +852 2341 1444 FAX
+852 2341 1414 E-mail info@bycpa.com
