Tax Administration

Date:2019-08-01      Source:sw.beijing.gov.cn

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Confirmation of Registration Information

Starting from October 1, 2015, newly established foreign-invested enterprises receive business licences with unified social credit codes issued by departments of industry and commerce and no longer need to obtain Tax Registration Certificates. Enterprises can use their business licences with unified social credit codes when handling tax-related matters.
Since November 1, 2017, when newly registered enterprises and farmers' professional cooperatives first deal with tax-related matters, the tax authorities, based on the registration information shared by the industrial and commercial departments, shall prepare the "Multiple-in-One Certificate" Registration Information Confirmation Form to remind taxpayers to supplement the incomplete information, correct the inaccurate information and correct the information that needs to be updated. Tax authorities no longer require them to fill in the Supplementary Information Form for First-time Taxpayers.
Taxpayers are responsible for the authenticity and legitimacy of their submitted materials. After submitting their "one licence and one code", information, taxpayers shall lodge relevant tax declarations in accordance with the law, administrative legislation or the declaration deadlines of tax authorities. Taxpayers can enter into entrustment agreements authorising the tax authorities to collect taxes, check accounts and supervise the whole process through payment services offered by related banks. If taxpayers require an invoice to be issued, this may be handled through various services by having the type of invoice they need ratified, the value-added tax control facility issue an invoice, and so forth. Taxpayers who need special value-added tax invoices must apply to the tax authorities to qualify for value-added tax general taxpayer registration, apply for endorsement of the maximum face value of the value- added tax invoices, and other issues.
Where an intermediary or other commission agent does the tax registration, the legal representative's (responsible person) power of attorney (the original document) of the entity as well as a copy of the commission agent's identity card shall be provided.

Taxes and Charges

Value-added tax

Value-added taxes for import or sale of goods, and processing, repair and assembly services

There are three different value-added tax rates in this category; 17 percent for the import or sale of goods, and processing, repairs and assembly services; 11 percent for the import or sale of grain, cooking oil, tap water, heat, cooling air, hot water, coal gas, liquefied petroleum gas, natural gas, methane, coal products for domestic use, books, newspapers, periodicals, fodder, chemical fertilisers, pesticides, agricultural machinery and plastic sheeting for agriculture; and zero for goods for export, unless otherwise stipulated by the State Council. From May 1, 2018, the annual sales of value-added tax should be less than 5 million yuan, which is a small-scale value-added taxpayer with a levy rate of 3%. The value-added tax shall be refunded or exempted for exports of goods by foreign-invested enterprises by virtue of relevant vouchers submitted to the local office of the State Administration of Taxation after export declaration of goods and sales accounting in respect of finance, unless otherwise stipulated by the State Council.

Value-added tax for taxable services

There are four different value-added tax rates in this category: 16 percent for leasing services of tangible movable property; 10 percent for transportation and postal services; 6 percent for modern service-industry services (except leasing services of tangible movable property); and zero for taxable services stipulated by the Ministry of Finance and the State Administration of Taxation. The rate is 3 percent for entities and individuals verified as small- scale taxpayers providing taxable sendees with annual sales of less than 5 million yuan.

Taxpayers providing taxable services where the zero tax rates apply should declare them to the relevant taxation authority on schedule for refund (exemption) of value-added tax. The Ministry of Finance and the State Administiation of Taxation shall formulate specific measures.

Sales tax

Sales tax covers 15 taxable items with 39 tax rates (tax amounts), ranging from 1 percent to 56 percent. Sales tax is levied on retail sales of gold and silver jewellery, diamonds and diamond jewellery, as well as ultra-luxury cars; on the production and wholesale of cigarettes; and on production of other taxable goods. Sales tax on mulled rice wine, beer and refined oil products is levied based on output; for cigarettes and white spirits it is based on both output and price; while for other taxable goods it is based on price. Exemption from sales tax shall be granted for taxable goods exported by taxpayers, except as otherwise stipulated by the State Council.

Corporate Income tax

(1) Enterprises are exempt from corporate income tax on income from the following businesses:

◎ Planting vegetables, grains, yams, oil craps, soy, cotton, flax, sugar, fruit and nuts;

◎ Cultivating new crop varieties;

◎ Planting traditional Chinese medicine crops;

◎ Planting and cultivating forests;

◎ Breeding livestock and poultry;

◎ Harvesting forestry products;

◎ Irrigation, preliminary processing of agricultural products, dissemination of veterinary skills and agricultural techniques, operation and repair of agricultural equipment, and other agricultural, forestry, animal husbandry and fishing services;

◎ Deep-sea fishing.

(2) Enterprises are exempt from half of the corporate income tax on income from the following businesses:

◎ Planting flowers, tea and other beverage or spice crops;

◎ Saltwater and freshwater aquaculture.

Enterprises engaged in businesses restricted or forbidden by the State shall not enjoy the aforementioned corporate income tax exemptions.

(3) Public infrastructure projects with the key support of the State refer to projects of harbours and wharfs, airports, railways, highways, urban public transport electric power and water conservation specified in the Catalogue of Public Infrastructure Projects Eligible for Corporate Income Tax Preferential Treatment.

If enterprise income is from the investment in and operation of public infrastructure projects supported by the State, the enterprise income tax from the first year after obtaining the first sum of production and operation income to the third year shall be fully exempt, and be halved from the fourth year to the sixth year. The first sum of production and operation income refers to the first sum of income obtained after a public infrastructure project has been completed and put into operation. Projects, though involving exempted items, conducted under contract operation, contract construction or construction by an enterprise for itself are excluded from the exemptions.

(4) If enterprise income is from the operation of eligible eco-friendly or energy- or water- saving projects, the corporate income tax from the first year after obtaining the first sum of production and operation income to the third year shall be fully exempted, and be halved from the fourth year to the sixth year.

(5) Yearly income of no more than 5 million yuan earned from technology transfers by resident enterprises is eligible for exemption from corporate income tax. The part of the said income exceeding 5 million yuan is eligible for a 50 percent reduction of corporate income tax.

(6) In compliance with the Notice of the Ministry of Finance and the State Administration of Taxation on Expanding the Scope of Preferential Income Tax for Small Enterprises with Low Profits (Cai Shui 〔2017〕No.43), the ceiling of annual taxable income generated by small enterprises with low profits has been raised from 300,000 yuan to 500,000 yuan. The small enterprises with low profits that generate annual taxable income of no more than 500,000 yuan shall have 50 percent of taxable income exempted from corporate income tax, and the tax rate of 20 percent shall be applied from January 1, 2017 to December 31, 2019.

The said small enterprises with low profits refer to those engaged in industries that are not restricted or forbidden by the State and conform to the following conditions:

1. Industrial enterprises with annual taxable income of no more than 500,000 yuan, and no more than 100 employees and a total capital of no more than 30 million yuan;

2. Other kinds of enterprises with annual taxable income of no more than 500,000 yuan, and no more than 80 employees and a total capital of no more than 10 million yuan.

(7) Corporate income tax is collected at a tax rate of 15 percent for high-tech enterprises with the key support of the State. The said enterprises must meet the following requirements:

◎ The enterprise has been registered for not less than one year when applying for certification;

◎ The enterprise shall own intellectual property rights of technologies that show core support to their key products (services) by such means as independent research and development, transfer, donation or merger;

◎ The technologies that show core support to their key products (services) shall fall within the scope as stipulated in the Advanced and New Technology Areas Eligible for the Key Support of the State

◎ The number of scientific and technical personnel engaged in research and development as well as relevant technology innovation activities shall account for not less than 10 percent of the total number of employees of the enterprise for the current year;

◎ The proportion of its total research and development expenditure in the past three fiscal years (or during the actual period of business operations if three years have not lapsed since the formation of the enterprise, the same as below) to its total sales revenue during the same period shall meet the following requirements:

① If the sales revenue of the enterprise in the latest year is not more than 50 million yuan, the proportion shall not be less than 5 percent;

② If the sales revenue of the enterprise in the latest year is more than 50 million yuan but not more than 200 million yuan, the proportion shall not be less than 4 percent;

③ If the sales revenue of the enterprise in the latest year is more than 200 million yuan, the proportion shall not be less than 3 percent.

In particular, the proportion of the total research and development expenses incurred within China to the total research and development expenses shall not be less than 60 percent;

◎ The enterprise's revenue from high-tech products (or services) shall account for not less than 60 percent of its total revenue in the latest year;

◎ The evaluation of the enterprise's ability to innovate shall satisfy the corresponding requirements;

◎ No major safety accidents, major quality-control accidents or serious environmental violations of law have occurred within one year before the enterprise applies for certification.

(8) If research and development expenses for new technologies, new products and new crafts cannot be formed into intangible assets suitable for accounting in current profits and losses, the research and development expenses shall be given a deduction plus 50 percent based on the said expenses. If the research and development expenses can be transformed into intangible assets, they shall be amortised as per 150 percent of the costs of the intangible assets. If research and development expenses actually generated by small and medium- sized enterprises cannot be formed into intangible assets suitable for accounting in current profits, and losses, the research and development expenses shall be given a deduction plus 75 percent based on the said expenses before tax from January 1, 2017 to December 31, 2019. If the research and development expenses can be transformed into intangible assets, they shall be amortised as per 175 percent of the pre-tax costs of the intangible assets during the said period.

(9) Salaries paid to disabled persons employed by enterprises shall qualify for a deduction plus 100 percent of the said expenses from the taxable corporate income. The scope of disabled persons are subject to the Law of the People's Republic of China on the Protection of Disabled Persons.

The regulations on additional deduction of salaries paid by enterprises to other employees encouraged by the State shall be otherwise stipulated by the State Council.

(10) In accordance with the Notice on Pilot Tax Policies for Venture Capital Enterprises and Individual Angel Investors (Cai Shui 〔2017〕 No.38), if a venture capital enterprise directly invests in a small or medium-sized high-tech enterprise, or a seed and start-up high-tech enterprise in the way of equity investment for no less than 2 years (24 months), 70 percent of the investment amount shall be deducted from the taxable corporate income of the said enterprise in the second year of shareholding. If the taxable corporate income is not enough for deduction in the second year of shareholding, it can be deducted in the following taxable years.

(11) For enterprises whose main raw materials are included in the Income Tax Preferential Directory for Comprehensive Utilisation of Resources of Enterprises, if the income is obtained from products that are not restricted or forbidden by the State and conform to relevant standards of the State and industry, this part of taxable income can be deducted by 10 percent.

(12) If equipment purchased and utilised by an enterprise for environmental protection, energy and water conservation, and production safety is included in the Corporate Income Tax Preferential Directory on Equipment Favouring Environmental Protection, the Corporate Income Tax Preferential Directory on Equipment Favouring Energy and Water Conservation, or the Corporate Income Tax Preferential Directory on Equipment Favouring Production Safety , 10 percent of the investment amount of the equipment shall be deducted from taxable income of the enterprise in the current year; if the taxable income is not enough for deduction, it can be deducted in the following 5 taxable years.

Enterprises enjoying corporate income tax preference specified in this clause should actually purchase and use the equipment specified in the preceding paragraph. If an enterprise leases or transfers the aforesaid equipment within five years after purchase, the tax preference it enjoys shall cease and the enterprise will have to pay back taxes already deducted.

(13) Enterprises that own major or key fixed assets and use them for production and operation can shorten the depreciable life or accelerate depreciation on those assets if:

◎ The rapid upgrading of products requires technological improvement;

◎ Or the equipment is used in strongly vibrating or corrosive conditions.

The minimum depreciable life is no less than 60 percent of the depreciable life specified in Article 60 of the Implementation Regulations of the Law of the People's Republic of China on Corporate Income Tax. The double declining balance method or the sum of the years' digits method can be adopted as depreciation acceleration methods.

According to the Document (Cai Shui 〔2014〕 No.75), from January 1, 2014, the following provisions on corporate income tax related to accelerated depreciation of fixed assets should be followed:

◎ As for fixed assets newly purchased by six industries (biopharmaceutical manufacturing; special equipment manufacturing; railway, vessel, aerospace and other transportation equipment manufacturing; computer, communications and other electronic equipment manufacturing; instrumentation manufacturing; and the information transmission, software and information technology service industry), after January 1, 2014, the depreciation period can be shortened or the accelerated depreciation method can be adopted.

Instruments and equipment with a unit value of no more than 1 million yuan newly purchased by small enterprises with low profits in the six industries aforementioned after January 1, 2014 for research, development, production and operation, are allowed to be incorporated on a one-time basis into costs for that period, which should be deducted from taxable income, and yearly depreciation calculation will not be applied; regarding those with a unit value of more than 1 million yuan, the depreciation period can be shortened or the accelerated depreciation method can be adopted.

◎ Instruments and equipment with a unit value of no more than 1 million yuan, newly purchased by enterprises in all industries after January 1, 2014 exclusively for research and development are allowed to be incorporated on a one-time basis into costs for that period, which should be deducted from taxable income, and yearly depreciation calculation will not be applied; regarding those with a unit value of more than 1 million yuan, the depreciation period can be shortened or the accelerated depreciation method can be adopted.

◎ Fixed assets with a unit value of no more than 5,000 yuan are allowed to be incorporated on a one-time basis into costs for that period, which should be deducted from taxable income, and yearly depreciation calculation will not be applied.

◎ As for enterprises which shorten the depreciation time according to the first two provisions aforementioned, the depreciation time shall be no less than 60 percent of that stipulated in Article 60 of the Regulations of the People's Republic of China on the implementation of the Corporate Income Tax Law; regarding those adopting accelerated depreciation, the double declining balance method or the sum of the years' digits method can be applied. Issues on corporate income tax related to accelerated depreciation of fixed assets, which are unmentioned by the first three provisions of the notice, should be handled according to the Enterprise Income Tax Law, its implementation regulations and current policies on tax revenue as usual.

According to the Document (Cai Shui 〔2015〕 No.106), the following provisions should be followed:

◎ As for fixed assets newly purchased by four industries (the light industry, textile industry, machinery industry and automobile industry), after January 1, 2015, the depreciation period can be shortened or the accelerated depreciation method can be adopted.

◎ Instruments and equipment with a unit value of no more than 1 million yuan newly purchased by small enterprises with low profits in the four industries aforementioned after January 1, 2015 for research, development, production and operation, are allowed to be incorporated on a one-time basis into costs for that period, which should be deducted from taxable income, and a yearly depreciation calculation will not be applied; regarding those with a unit value of more than 1 million yuan, the depreciation period can be shortened or the accelerated depreciation method can be adopted.

◎ As for enterprises which shorten the depreciation time according to the first two provisions aforementioned, the depreciation time shall be no less than 60 percent of that stipulated in Article 60 of the Regulations of the People's Republic of China on the Implementation of the Corporate Income Tax Law; regarding those adopting accelerated depreciation, the double declining balance method or the sum of the years' digits method can be applied.

According to the Regulations of the People's Republic of China on the Implementation of the Corporate Income Tax Law and its implementation regulations, enterprises have the right not to adopt the accelerated depreciation method based on their own operational needs.

According to the article of Cai Shui 〔2018〕No.54, it is stipulated as follows:

◎ If the unit value of newly purchased equipment and appliances does not exceed 5 million yuan during the period from January 1, 2018 to December 31, 2020, the enterprise shall be allowed to deduct the current cost and expenses in the calculation of taxable income at one time, and no depreciation shall be calculated annually.

◎ The term "equipment and appliances" as mentioned in this Notice refers to fixed assets other than houses and buildings.

(14) If an enterprise is engaged in projects that are applicable to different enterprise income tax treatments at the same time, its preferential items shall calculate the income separately and reasonably share the period expenses of the enterprise; if there is no separate calculation, it shall not enjoy preferential enterprise income tax.

Individual income tax

On January 1, 2019, the new Individual Income Tax Law fully implemented by China adopted a comprehensive and classified personal income tax system. In the fourth quarter of 2018, the transition period policy have been implemented, i.e. income from wages and salaries, income from production and operation of individual industrial and commercial households, and the deduction standard of 5,000 yuan per month shall be applied to the contractual lease and operation income of enterprises and institutions, and the new tax rate table shall be applied. According to the provisions of the Individual Income Tax Law of the People's Republic of China, all kinds of income obtained by individuals are divided into comprehensive income and classified income. The comprehensive income includes wages, salaries, and remuneration for services, contributions and royalties. There are five categories of income: operating income, interest, dividend, dividend income, property leasing income, property transfer income and accidental income. The individual income tax shall be calculated on the basis of the consolidated income tax year; the individual income tax shall be calculated on a monthly or sub-item basis if the non-resident individual obtains the consolidated income. Taxpayers who obtain classified income shall calculate individual income tax separately in accordance with the provisions of the Individual Income Tax Law of the People's Republic of China.

Individual income tax rates can be categorised into two kinds; the excess progressive tax rate and proportional tax rate.

(1) Salaries and remuneration are subject to the excess progressive tax rates, with 7 levels that range from 3 percent to 45 percent.

(2) Incomes of private industrial and commercial merchants from production and operation as well as incomes of businesses contracting and renting to enterprises and public institutions are subject to the excess progressive tax rates, with 5 levels that range from 5 percent to 35 percent.

(3) Income from labour services, author's contribution fees, royalties, property rentals, property transfers, interest, dividends and bonuses, incidental income, and other income is subject to the tax rate of 20 percent.

 

Resident Individuals

Individuals who have domicile or no domicile in China and have resided in China for a total of 183 days in a tax year shall be resident individuals. Personal income tax shall be paid in accordance with the provisions of the Individual Income Tax Law of the People's Republic of China. (Tax year from January 1 to December 31 of Gregorian calendar)

Non-resident individuals
Individuals who have no residence in China, or who have no residence in China for less than 183 days in a tax year, are non-resident individuals. Income derived by non-resident individuals from China shall be subject to individual income tax in accordance with the provisions of the Individual Income Tax Law of the People's Republic of China.
Income from wages and salaries of non-residents shall be taxable income from the balance of monthly income minus expenses of 5,000 yuan; income from remuneration for services, contributions and royalties shall be taxable income from each income. Where there are withholding agents in the income of wages and salaries, remuneration for services, remuneration for manuscripts and royalties obtained by non-residents, the withholding agents shall withhold taxes on a monthly basis or on a successive basis, and shall not handle settlement. Where a non-resident individual obtains wages and salary income from more than two places within the territory of China, he or she shall declare and pay taxes within 15 days of the next month in which the income is obtained.

Land value-added tax

Taxpayers of land value-added tax: enterprises or individuals who gain income by transferring the use rights of national land and buildings on land and their attachments, including various enterprises and public institutions, governmental departments, social organisations, self-employed individuals, and other organisations and individuals.

Land value-added tax is calculated according to the value added during the transfer of real estate, which is the balance after deducting stipulated deduction items from the taxpayer's income from the transfer of real estate. The income of a taxpayer from the transfer of real estate includes all the money gained through the transfer of real estate, such as monetary income, income in kind and other incomes, as well as related economic benefits.

Deduction items in calculation of value added include:

◎ Fees paid for obtaining land-use rights.

◎ Costs of land development and construction of new buildings and supporting facilities (costs of real-estate development), including expenses for land expropriation, relocation compensation, advance earthwork, construction and installation, infrastructure and public supporting facilities, and development overhead.

◎ Costs of land development and construction of new buildings and supporting facilities (costs of real-estate development), including sales costs, management fees and financial costs.

◎ Assessed prices of old buildings and structures used for more than one year, which are obtained by multiplying the replacement cost price assessed by a real-estate assessment institution ratified by the People's Government of Beijing Municipality by the discount rate of conditions and confirmed by a local relevant taxation authority, in transferring buildings and structures. When transferring buildings and structures, the taxpayer needs to assess the real estate value for tax calculation. Assessment fees may be deducted when the added value is calculated.

◎ Taxes related to the transfer of real estate include business tax, urban maintenance and construction tax and stamp duty. Educational surcharges paid due to the transfer of real estate may also be deducted.

◎ Additional deduction: For taxpayers involved in real-estate development, the additional deduction rate for the total cost of land-use rights and real-estate development is 20 percent.

Progressive rates above the normal rate are implemented for land value-added tax at the following four levels: 30 percent for the portion of the added value that does not exceed 50 percent of the total amount of deduction items; 40 percent for the portion of the added value that exceeds 50 percent of the total amount of deduction items but does not exceed 100 percent of the total amount of deduction items; 50 percent for the portion of the added value that exceeds 100 percent of the total amount of deduction items but does not exceed 200 percent of the total amount of deduction items; and 60 percent for the portion of the added value that exceeds 200 percent of the total amount of deduction items.

In any of the following circumstances, the land value-added tax shall be exempted:

(1) Taxpayers who build ordinary standard residential houses for sale and whose value- added does not exceed 20% of the amount deducted from the project;

(2) Real estate requisitioned or recovered in accordance with the law due to the need of state construction.

Real estate tax

Taxpayers: Real estate taxes shall be paid by foreign-invested enterprises, foreign enterprises and organisations and foreign individuals (including enterprises and organisations funded by Hong Kong, Macao and Taiwan as well as overseas Chinese and compatriots from Hong Kong, Macao and Taiwan, hereafter collectively referred to as "foreign-invested enterprises and foreign individuals"), in accordance with the Provisional Regulations of the People's Republic of China on Real Estate Tax and other relevant documents from January l, 2009.

Taxation scope: Collection of the real estate tax shall be in cities, counties, organic towns and industrial and mining areas. The collection scope of real estate tax in our city has been extended to the administrative villages under the city's jurisdiction.

Tax basis: Real estate tax is based on the original value or rent of real estate, that is, the residual value of self-used real estate after deducting 10% to 30% of the original value of real estate is taxed at the 1.2% tax rate, and the deduction ratio stipulated by our city is 30%. Rental income of rental real estate is taxed at the 12% tax rate.

Duration of tax payment: The real estate tax in our city shall be collected twice throughout the whole year, with tax assessable periods of April 1-15 and October 1-15.

Where foreign-invested enterprises or foreign individuals use a foreign currency for bookkeeping pay the real estate tax, taxes calculated in their reporting currency shall be converted into renminbi as per the central parity rate of renminbi on the last day of the month before the tax is paid.

Deed tax

The deed tax is a tax levied on the recipient of transferred land and houses. Taxpayers of the deed tax include all entities and individuals that receive land and houses transferred within China. Bases for determining the deed tax include:

◎ The transaction price of the transfer of state-owned land-use rights, sales of land-use rights and sales of houses;

◎ The donation price of land-use rights and house ownership assessed by the deed tax administration according to the market price or assessed price of sales of similar land-use rights and sales of houses;

◎ The difference in price when land use rights, house ownerships, and land use rights with house ownerships are exchanged;

◎ For land-use rights obtained through transfer, when the land and house receive permission to be transferred (except for inheritors who must pay the deed tax according to regulations), the person who transfers the land and house shall also pay the deed tax based on the transfer income of land-use rights or profit from the land;

◎ For partial ownership of land or houses that are inherited, it shall be based on the agreed- upon price of whatever portion is inherited. When partial ownership changes to full ownership, it will be based on the agreed-upon price of the full ownership rights; the portion already paid is deducted from the tax payment.

The applicable deed tax rate determined by Beijing is 3 percent. The scope of exemption from the deed tax includes:

◎ Houses purchased after an original house was lost due to force majeure, shall be exempt from the deed tax.

◎ After land and houses are requisitioned by the people's government above the county level, the person who receives new land and house rights, with transaction prices not exceeding the land and house compensation fees, shall not pay the deed tax.

◎ For urban employees who purchase public housing for the first time, the part of house area not exceeding the standard area stipulated by Beijing shall be exempt from the deed tax. The deed tax shall be paid for the part exceeding the stipulated standard area. For anyone with a house area smaller than the standard area and purchasing new public housing, their purchase shall be regarded as the first purchase.

◎ Land and houses received by government departments, public institutions and social organisations and military institutions for use as office (buildings), archives, employee dining halls, classroom (buildings), laboratory (buildings), playgrounds, libraries, canteens, student dormitories, clinics, laboratory test rooms, inpatient departments, pharmacies, and scientific research sites, and other land and houses approved by Beijing Municipal Bureau of Finance and Beijing Municipal Bureau of Local Taxation and directly used for offices, teaching, medical practice and scientific research, shall be exempt from the deed tax.

(5) Land and houses received by military institutions for aboveground and underground military command projects, military airports, storehouses, camps, training grounds, laboratories, observation stations, communication and navigation, as well as other land and houses used as military facilities and approved by Beijing Municipal Bureau of Finance and Beijing Municipal Bureau of Local Taxation, shall be exempt from the deed tax

(6) The analysis of jointly owned land and houses shall be exempt from the deed tax.

(7) Anyone who receives usage rights to a barren hill, barren trench, barren hillock or barren beach and uses it for farming, forestry, animal husbandry or fishing industry shall not pay the deed tax.

(8) With the approval of the Ministry of Foreign Affairs, diplomatic institutions of foreign countries in Beijing, institutions of the United Nations residing in Beijing and diplomats that receive the right to land and housing shall be exempt from the deed tax.

Other items with reduction of or exemption from the deed tax as stipulated by the Ministry of Finance shall be subject to provisions of the Ministry of Finance.

Urban land use tax

In the urban and suburban administrative areas of the city, entities and individuals that use land in the suburban districts, county governments (county towns) and construction towns and industrial and mining areas are taxpayers of urban land use tax (hereinafter referred to as land use tax). Land use tax is based on the actual land area occupied by taxpayers, and the occupied land area is determined according to the land occupied area of construction land planning license or land ownership document; if there is no construction land planning license or land ownership document, the land occupied area shall be determined by taxpayers' actual declaration and verification by local tax authorities. The tax level of land use tax in this city is divided into six levels. The annual tax amount per square metre is as follows: 30 yuan for grade-1 land, 24 yuan for grade-2 land, 18 yuan for grade-3 land, 12 yuan for grade-4 land, 3 yuan for grade-5 land and 1.5 yuan for grade-6 land (see the Urban Land Tax Brackets of Beijing Municipality for detailed classifications).

Farmland occupation tax

Entities and individuals that occupy farmland to construct buildings or engage in other non- agricultural construction in the administrative region of Beijing shall pay farmland occupation tax.

Entities include: state-owned enterprises, collective enterprises, private enterprises, joint- stock enterprises, foreign-invested enterprises, foreign enterprises and other enterprises, public institutions, social organisations, governmental departments, military units and other entities. Individuals include individual industrial and commercial merchants and other individuals.

The farmland occupation tax shall be calculated by multiplying the area of farmland actually occupied by taxpayers by the applicable tax rate. It is collected as a lump sum. Farmland occupation tax rates are as follows:

◎ Chaoyang District, Haidian District, Fengtai District and Shijingshan District: 45 yuan per square metre;

◎ Mentougou District, Fangshan District, Changping District, Huairou District and Pinggu District: 42 yuan per square metre;

◎ Daxing District, Tongzhou District, Shunyi District and Miyun District: 40 yuan per square metre;

◎ Yanqing District: 35 yuan per square metre;

◎ For taxpayers who occupy basic farmland, the above local tax rates are increased by 50 percent;

◎ Rural citizens who occupy farmland to construct houses shall pay half of the local farmland occupation tax rate;

◎ For farmland used for railways, highways, airstrips, aircraft parking areas, harbours and waterways, the farmland occupation tax shall be 2 yuan per square metre.

The farmland occupation tax shall be exempted under the following circumstances:

◎ Farmland occupied for military facilities;

◎ Farmland occupied for schools, kindergartens, homes for the elderly and hospitals.

Stamp duty

Stamp duty is a tax imposed on taxable vouchers created or received in economic activities. Entities and individuals creating and receiving vouchers specified in the provisional regulations on stamp duty in the People's Republic of China are taxpayers of stamp duty. Taxpayers of stamp duty specifically include: (1)contractors, (2)account openers, (3)note signers and (4)recipients.

There are two kinds of stamp duty: proportional tax and fixed tax. Proportional tax rates are 1/1,000, 5/10,000, 3/10,000 and 0.5/10,000. The fixed tax rate is 5 yuan per item. Applicable tax items and tax rates are as follows:

Items subject to the 1/1,000 rate: rental property contracts, storekeeping contracts and property insurance contracts.

Items subject to the 5/10,000 rate: processing contracts, construction engineering survey and design contracts, goods transport contracts and property ownership transfer documents as well as capital account books.

Items subject to the 3/10,000 rate: purchase and sales contracts, construction and installation contracts, and technology contracts.

Items subject to the 0.5/10,000 rate: loan contracts.

Items subject to the fixed-rate tax (set at 5 yuan per item): other account books, rights, licences and permits not listed above.

Taxpayers shall calculate payable taxes using a proportional rate or the fixed rate, according to the nature of the taxable vouchers. If the payable stamp duty is less than 0.1 yuan, the stamp duty shall be exempted. If the payable stamp duty is more than 0.1 yuan, the mantissa less than 0.05 yuan shall be omitted: the mantissa no less than 0.05 yuan shall be calculated as 0.1 yuan. If the stamp duty of a property lease contract is less than 1 yuan, the stamp duty shall be collected as per 1 yuan.

The following are exempt from stamp duty:

(1) Copies of vouchers with the stamp duty already paid;

(2) Documents on property owners donating properties to governments, social welfare units and schools;

(3) Other vouchers with exemption from the stamp duty approved by the Ministry of Finance. For example:

◎ Contracts on purchase of agricultural products and by products between the purchase department designated by the State and villagers committee and farmers;

◎ Contracts on interest-free and interest-subsidised loans;

◎ Contracts on provision of favourable loans by foreign governments or international financial organisations to the Chinese government and national finance departments.

To alleviate the burden on enterprises and encourage investment and entrepreneurship, the Ministry of Finance and the State Administration of Taxation issued the Notice on the Reduction and Exemption of Stamp Tax on Business Accounts (Cai Shui 〔2018〕 No.50) on May 3. The document stipulates that, from May 1, 2018, stamp duty shall be levied on half of the capital account book decaled at the tax rate of 5/10000, and stamp duty shall be exempted on other account books decaled at five yuan per piece.

Vehicle and vessel tax

In the People's Republic of China, owners or managers of vehicles and vessels as set out in the Schedule of Vehicle and Vessel Tax Items and Amounts attached to the Law of the People's Republic of China on Vehicle and Vessel Tax shall pay taxes in accordance with the law. Tax items and amounts applicable to various vehicles and vessels are set out in the following schedule:

Urban maintenance and construction tax

Urban maintenance and construction tax, an additional tax imposed on entities and individuals that pay value-added tax, consumption tax and business tax, is used for the maintenance and construction of urban public utilities and facilities. Urban maintenance and construction tax is calculated based on the actual payment of value-added tax, consumption tax and business tax and shall be paid simultaneously with those taxes.

Applicable urban maintenance and construction tax rates in Beijing are as follows:

7 percent for taxpayers in Dongcheng District, Xicheng District and the development zone, and in the administrative regions of the sub-district offices of Chaoyang District, Haidian District, Fengtai District, Shijingshan District, Mentougou District and Yanshan area;

5 percent for taxpayers in suburban counties and towns; 1 percent for other taxpayers.

If the urban maintenance and construction tax is withheld and remitted or collected and remitted, it shall be withheld and remitted or collected and remitted at the tax rate applicable to the entity that withholds and remits or collects and remits the tax.

The ranges of the aforesaid sub-district offices, counties and towns are based on the administrative division by the People's Government of Beijing Municipality.

The collection, supervision, payment links, reward and punishment of the urban maintenance and construction tax are performed in line with the related provisions of the value-added tax, consumption tax and business tax.

The State Council released the Provisional Regulations of the People's Republic of China on Urban Maintenance and Construction Tax on February 8, 1985; the People's Government of Beijing Municipality released the Rules for Beijing to Implement the Provisional Regulations of the People's Republic of China on Urban Maintenance and Construction Tax on May 11, 1985. According to the Notice of the State Council on Unifying the Urban Maintenance and Construction Tax and Educational Surcharges for Domestic and Foreign-Funded Enterprises and Individuals (Guo Fa 〔2010〕 No.35) released by the State Council, from December 1, 2010, foreign-invested enterprises, foreign enterprises and foreign individuals shall pay urban maintenance and construction taxes.

Educational surcharge

The educational surcharge is an additional charge for entities and individuals that pay value- added tax, consumption tax and business tax, except entities paying the additional fee for rural education in line with the Notice of the State Council on Collecting the Rural Education Fee (Guo Fa 〔1984〕 No.174). Educational surcharges are levied by the tax authorities and used as a special fund for education. The educational surcharge is calculated based on the actual payment of value-added tax, consumption tax and business tax and shall be paid simultaneously with those taxes.

The educational surcharge rate is 3 percent.

Collection and management of educational surcharges are performed in line with the related provisions on value-added tax, consumption tax and business tax.

The Provisional Regulations on Levying Educational Surcharges was promulgated by the State Council on April 28, 1986. According to the Notice of the State Council on Unifying the Urban Maintenance and Construction Tax and Educational Surcharges for Domestic and Foreign-Funded Enterprises and Individuals (Guo Fa 〔2010〕 No.35) released by the State Council, from December 1, 2010, foreign-invested enterprises, foreign enterprises and foreign individuals shall pay education surcharges.

Local educational surcharge

From January 1, 2012, entities and individuals that pay value-added tax, consumption tax and business tax in the administrative region of Beijing shall pay local educational surcharges, which are equal to 2 percent of the total amount of value-added tax, consumption tax and business tax.

Employment Security Fund for Persons with Disabilities

Employment security fund for the disabled is a fund paid by organs, organizations, enterprises, institutions and private non-enterprise units (hereinafter referred to as employing units) that fail to arrange employment for the disabled according to regulations to protect the rights and interests of the disabled.

Employing units within the administrative region of Beijing shall arrange employment for disabled persons in accordance with the proportion of not less than 1.7% of the total number of employees in their units. If the proportion fails to meet the above-mentioned provisions, they shall pay employment security for disabled persons.

The employment security fund for the disabled shall be calculated and paid on the basis of the difference between the number of persons with disabilities who have not reached the prescribed proportion in employment arranged by the employing unit in the previous year and the accumulated average annual wage of the working staff of the unit. The calculation formula is as follows:
The annual contribution of the employment security fund for the disabled = (the number of employees in the employing unit in the previous year × 1.7% - the number of persons with disabilities actually arranged by the employing unit in the previous year) × the average annual wage of the employees in the employing unit in the previous year.

Employment security benefits relief policy for disabled persons:

1) If the average annual wage of the employees in the employing unit does not exceed twice (including twice) the average social wage of Beijing in the previous year, it shall be calculated on the basis of the actual average annual wage of the employees in the employing unit; if the average annual wage exceeds twice the average social wage of Beijing in the previous year, it shall be calculated on the basis of twice the average social wage of Beijing in the previous year. The average social wage refers to the average social wage published by the human resources and social security department and the statistical department of Beijing.

2)Within three years from the date of registration of industry and commerce, the employment security fund for the disabled shall be exempted in small and micro-enterprises where the number of persons with disabilities has not reached 1.7% of the total number of employees in service, and the total number of employees in service is less than 30 (including 30). After adjusting the scope of exemption, enterprises with less than three years of industrial and commercial registration and less than 30 employees (including) in service may exempt disabled persons from employment security payments in accordance with the provisions in the remaining period.

3)If an employing unit suffers major direct economic losses from force majeure natural disasters or other emergencies, it may apply for relief or postponement of payment of employment security funds for disabled persons.

Trade union funds

Enterprises, institutions and other organizations that establish trade union organizations (except administrative organs and institutions that administer the full budget of trade union funds allocated by the central government and by the public finances) shall raise trade union funds by 2% of the total salaries of all employees last month before the 15th day of each month. Enterprises, institutions and other organizations that have not established trade union organizations shall, from the date of receiving the official letters from higher level trade unions to help and guide grass-roots units to form trade unions, raise trade union funds monthly at 2% of the total salaries of all workers last month for the establishment of trade unions and their services.

All employees refer to those who work in enterprises, institutions and other organizations or have established labor relations or employ relations with enterprises, institutions or other organizations and obtained salaries. This also include those who leave their own entities but still retain labor relations and those who have retired. In which, the employees of foreign- invested enterprises shall include Chinese, Hong Kong, Macao and Taiwan and foreign employees. Foreign employees refer to mental and manual workers who work and earn salaries and income in foreign-invested enterprises and are non-nationality of the People's Republic of China.

The determination of the total salaries of employees shall be carried out in accordance with the provisions of the State Statistical Bureau on the Provisions on the Composition of Total Salaries and the interpretation of the new indicators of labour wage statistics. The total salary refers to the total amount of labor remuneration paid directly to all employees of the entity within a certain period of time.

The calculation of total salary shall be based on the total remuneration paid directly to the employees. If the total salary is difficult to determine, it shall be calculated by multiplying the average social wage of Beijing last year by the total number of employees.

Enterprises, institutions and other organizations shall report truly and pay trade union funds to the tax authorities for the last quarter at the place of tax registration within 15 days from the end of each quarter (postponement of statutory holidays).

Enterprises, institutions and other organizations may declare on-line or directly report trade union funds to the tax authorities at the place of tax registration.

Enterprises, institutions and other organizations that fail to pay or underpay trade union funds within the time limit should make a supplementary payment in time, and in accordance with the relevant provisions of the Measures for the Implementation of the Trade Union Law of the People's Republic of China in Beijing, a late fee shall be legally charged at the amount of 5‰ per day in arrears.

Beijing Municipal Tax Service, State Taxation Administration

Address: No.8 and No.10 Chegongzhuang Street, Xicheng District, Beijing Zip code: 100044

Tel: (8610) 8837 6014

Fax: (8610) 8837 2016

Website: www.bjsat.gov.cn Tax Service Hotline: 12366