China Corporate Tax
APAC Taxation provide Corporate Income Tax (CIT) services to Chinese businesses, as well as foreign businesses either with a base in China or income in China. We help our clients reduce their tax liability while ensuring they remain compliant to don’t appear on the radar of the State Administration of Tax (SAT). We use highly evolved strategies that provide our clients with a return on investment. If you want to talk to us to discuss your business and how we can optimize your tax, get in contact with us now.
TRE’s vs. non-TRE’s
Companies in China are either considered Tax Resident Enterprises (TRE’s) or Non Tax Resident Enterprise (non-TRE’s). Generally the difference between the two is TRE’s pay tax on worldwide income, whereas non-TRE’s only pay tax on income within China. This isn’t entirely accurate. A better way of thinking about it is splitting up into four types of companies in China; two which are TRE’s and two which are non-TRE’s.
Four types of companies
TRE’s. All TRE’s pay tax on worldwide income. TRE’s can either be;
- Companies established in China
- Foreign companies that have effective management located in China. Effective management is defined as substantial and overall management and control encompassing business and manufacturing operations, financial, human resources, and property aspects of the entity.
Non-TRE’s. There’s s light variation on tax rules for different types of non-TRE’s. These are explained below.
- Foreign companies with an establishment or place in China. This type of non-TRE is taxed on income from inside China
- Foreign companies that don’t have an establishment or place in China. This type of non-TRE is taxed on income from inside China as well as income earned outside China but is connected with the company in China
What is the corporate tax rate in China?
The standard CIT rate for enterprises in China is 25%. There are some lower CIT rates for some sectors. There is a qualification process. These are all subject to an assessment based on prescribed criteria.
- New/high tech enterprises – 15%.
- Technology-advanced Service Enterprises – 15%.
- Key software production enterprises and integrated circuits design – 10%.
- Small and thin-profit enterprises with an annual taxable income of less that 1 million yuan renminbi (CNY). Available up until 31 December 2021 – 5%.
- Qualified enterprises engaged in pollution prevention and control. Available up until 31 December 2021. – 15%.
- Qualified enterprises in the Western Regions. Available up until 31 December 2030 – 15%.
Corporate Tax Services in China
- Corporate Tax Return
- Value Added Tax (VAT)
- Tax Equalization
- Tax Planning
- Tax Clearance
- Tax Exemption
- Transfer Pricing
- Common Reporting Standard (CRS)
- And more.
How APAC Taxation can help
Our qualified tax accountants can help your business minimize its tax. Our team is experienced at tax optimization strategies. We can find the best way to structure your tax to provide you with the most benefit. To find out more, fill in our quote form for a free no-obligation quote, or call us now and speak to one of our team.