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 Deed Tax
(1) Taxpayers
The taxpayers of Deed Tax are those enterprises, units, individual
household businesses and other individuals who are the transferees
of house property transferred within the territory of China.
(2) Tax base
The Deed Tax is normally based on one of followings:
a. The transactional price in case of sale/purchase of houses
or sale or use right of State-owned land;
b. Assessment made by tax collection offices in reference to
the market price of land use right sale or house sale in case
of transferring land use right or house as gift; or
c. The difference of the land use right price and the house
price in case of exchange of land use right and house.
(3) Tax rates and computation of tax payable
Deed Tax adopts a flat rate within the range of 3%-5%. The rate
applicable in jurisdictions at provincial level shall be determined
within the above range by the government at the provincial level.
The formula for computing the tax payable is:
Tax payable = Tax base ×Applicable rate
(4) Major tax exemptions and reductions
The Deed Tax exemptions may be granted on the land and houses
received by the Governmental organs, institutions, social organizations
and military units for the use of offices, lecturing, medical
treatment, scientific research and military facility; the State-owned
house purchased for the first time by employees in cities and
towns in conformity with relevant rules; the use right of barren
mountains, barren gullies, barren hills and/or barren beaches
received for use in agriculture, forestry, animal husbandry
and/or fishery industry; and those diplomatic organizations
and staff satisfying the relevant rules of tax exemption. Residential
houses purchased as a result of house loss due to force majeure
may be given tax reduction or exemption.
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
