《-商务秘书实务(第四版)》教学课件Chapter-26-A-Briefing-on-the-Tax

Chapter26

ABRIEFINGON

THETAXES

INCHINAContentsTypesofTaxesStateTaxesandLocalTaxesLegislatorsandAdministratorsofTaxesTaxabilityofForeignersandNon-residentsDetailDemonstration:UrbanandTownshipLandUseTaxTaxisacontributionforthesupportofagovernmentrequiredofpersons,groups,orbusinesseswithinthedomainofthatgovernment.Asthemostimportantsourceoffiscalrevenue,taxisakeycomponentofChina'smacro-economicpolicy,andgreatlyaffectsitseconomicandsocialdevelopment.Withthechangesmadesincethe1994taxreform,Chinahassetupastreamlinedtaxsystemgearedtoits

socialistmarketeconomy.AllcompaniesthatoperateinChinahavetopaytaxestotheChinesegovernment.Acorporatesecretary,therefore,frequentlyhastodealwithtaxationofficialsandworkontax-relatedmatters.ItisclearlytotheiradvantagetohavesomebackgroundknowledgeaboutthetaxesleviedinChina.Inthischapter,wearegoingtogiveabriefingonthetaxesinChina.TypesofTaxesFirstofall,let'sseehowmanytypesoftaxthereareinChina.UnderthecurrenttaxsysteminChina,thereare17typesoftaxes,which,accordingtotheirnatureandfunction,canbedividedintothefollowing6categories:1. Commodityandlabortaxes Thisincludesthefollowing3typesoftaxes:Value-AddedTaxConsumptionTaxTobaccoTaxThelevyofthesetaxesisnormallybasedonthevolumeofturnoverorsalesofthetaxpayersinthemanufacturing,circulationorservicesectors.Whilevalue-addedtax(VAT)isapplicabletoallservicesandcommodities,consumptiontaxisonlyapplicabletothesalesormanufacturingofconsumergoods.Tobaccotaxisonlyleviedonthesalesoftobacco.2. Incometaxes Thiscategoryincludesthefollowing2typesoftaxes:EnterpriseIncomeTaxIndividualIncomeTax Theformerisleviedonthebasisoftheprofitsgainedbyproducersordealers;thelatter,whichissometimesalsocalledpersonalincometax,isleviedonthebasisoftheincomeearnedbyindividuals.3. Resourcetaxes Thiscategoryconsistsof

2typesoftaxes:ResourceTaxUrbanandTownshipLandUseTax

Theformerisapplicabletotheexploitersengagedinnaturalresourceexploitation;thelatterisapplicabletotheusersofurbanandtownshipland.Theformerreflectsthechargeableuseofstate-ownednaturalresources,forexample,crudeoil,naturalgas,coal,ferrousandnon-ferrousminesandsalt.Thelatterisleviedonthelandusedbycompaniesorindividuals.4. Propertyandbehavioraltaxes Thiscategoryencompasses

thefollowing4typesoftaxes:HousePropertyTaxVehicleandVesselUseTaxStampTaxDeedTaxThesetaxesareleviedonpropertiesorspecifiedbehaviors.Thefirstoneisleviedonhousesorapartments.EveryonewhoownsahouseoranapartmentinChinashouldpaythistaxtothelocalgovernment.However,sincethistaxisfairlynew,ithasnotbeenleviedinsomecitiesyet.Thesecondtaxisleviedonvehiclesandvessels.IfyouhaveacaroraboatinChina,thenyouhavetopaythistaxforusingthecarorboat.Thethirdoneisleviedonsomelegaldocuments,forexample,contracts,propertyownershipcertificate,accountant'sbooks.Thefourthoneisleviedonthetransactionsorothertransfersofhousingproperties.5. Taxesforspecialpurposes Thiscategoryincludesthefollowing4typesoftax:CityMaintenanceandConstructionTaxFarmlandOccupationTaxLandAppreciationTaxVehicleAcquisitionTaxThesetaxesareleviedonspecificitemsforspecialregulativepurposes.Thefirstoneiscalculatedonthebaseofvalue-addedtaxandconsumptiontaxthatataxpayerpays.ItisalsocollectedtogetherwithVATandconsumptiontax.Thismeansthatordinarypeoplewhoarenotinvolvedinthesalesandmanufacturingactivitiesdonothavetopaythistax.Thesecondoneisleviedonthenon-agriculturalproductionactivitiesorotheractivitiesthatoccupyfarmland.Thethirdoneisleviedonthetransactionsofland.Thefourthoneisleviedonallthepurchasesofvehicles,includingautomobiles,motorcyclesandtrucks,etc.6. Customsduties. Thiscategoryconsistsof2typesoftax:CustomsdutiesVesselTonnageTax

TheformerareimposedonthegoodsandarticlesimportedintoandexportedoutoftheterritoryofthePeople'sRepublicofChina.Thelatterisleviedontheshipsthatareownedorhiredbyforeigncompaniesorjoint-venturesandthatusetheharborfacilitiesofChina.StateTaxesandLocalTaxesTaxesleviedinChinacanbedividedintotwomaingroups:Statetaxesandlocaltaxes.Theformerarecollectedbysomestateorgans,whereasthelatterarecollectedbylocalgovernments. Thestatetaxgrouphasthefollowing6typesoftax:value-addedtax,consumptiontax,resourcetax,vehicleacquisitiontax,Customsdutiesandvesseltonnagetax.Thelocaltaxgrouphasalltheremaining11typesoftax.LegislatorsandAdministratorsofTaxesStateorgansthathavetheauthoritytoformulatetaxlawsortaxpoliciesincludethe

NationalPeople'sCongress

andits

StandingCommittee,the

StateCouncil,the

MinistryofFinance,the

StateAdministrationofTaxationandthe

GeneralAdministrationofCustoms.ThelawsofChinastipulatethatwithintheframeworkofthenationaltaxlawsandregulations,somelocaltaxregulationsandrulesmaybeformulatedbythePeople'sCongressesattheprovinciallevelandtheirStandingCommittees,thePeople'sCongressesofminoritynationalityautonomousprefecturesandthePeople'sGovernmentsattheprovinciallevel.Thegovernmentagencyinchargeofthestatetaxpoliciesisthe

MinistryofFinance.Forthecollectionofstatetaxes,

theagencyistheStateAdministrationofTaxation.Forlocaltaxes,theagenciesinchargeoftaxpoliciesaretheprovincialbureausoffinanceandthecollectingjobisdonebytheprovincialtaxationbureaus.TaxabilityofForeignersandNon-residentsInanefforttoencourageinwardflowoffunds,technologyandinformation,Chinaprovidesnumerouspreferentialtreatmentsinforeigntaxation,andhassuccessivelyconcludedtaxtreatieswithmanycountries,includingJapan,theUSA,France,theUK,Germany,Singapore,Canada,Italy,theNetherlands,Australia,SouthKorea,Russia,India,Israel,etc.Overfiftyofthesetreatieshavebeeninforce.Obviously,foreignersandtheirenterprises,orenterpriseswithforeigninvestments,havedifferenttaxabilityfromthatofChinesecitizensandChineseenterprises.Theyaretreatedwithmorefavorabletaxpolicies.TheChinesepeoplefromHongKong,

Macao,

Taiwan,

and

overseasChinese

aretaxedinreferencetothetaxationpoliciesonforeigners.TheirenterprisesinChinaorenterpriseswiththeirinvestmentaretaxedinreferencetothetaxationpoliciesforforeignenterprises.DetailDemonstration:UrbanandTownshipLandUseTaxMostofthetaxesintroducedabovehaveverydetailedstipulationsastohowtolevy.SincethisbookisnotonespecializingontaxationinChina,wecanonlyraiseoneexampleheretodemonstratethecomplexityofthedetails.Inthefollowingweelaborateonthestipulationsofurbanandtownshiplandusetax.(1)Taxpayers ThetaxpayersofUrbanandTownshipLandUseTaxincludeallenterprises,units,individualhouseholdbusinessesandotherindividuals(excludingenterpriseswithforeigninvestment,foreignenterprisesandforeigners).(2)Taxpayableperunit Thetaxpayableperunitisdifferentiatedwithdifferentrangesfordifferentregions.Theannualamountoftaxpayablepersquaremeteris:0.5-10yuanforlargecities,0.4-8yuanformedium-sizecities,0.3-6yuanforsmallcities,or0.2-4yuanforminingdistricts.Uponapproval,thetaxpayableperunitforpoorareasmaybeloweredorthatfordevelopedareasmayberaisedtosomeextent.(3)Computation Theamountoftaxpayableiscomputedonthebasisoftheactualsizeofthelandoccupiedbythetaxpayersandbyapplyingthespecifiedapplicabletaxpayableperunit.Theformulais:Taxpayable=Sizeoflandoccupied×Taxpayableperunit(4)Majorexemptions

Taxexemptionsmaybegivenonlandoccupiedbygovernmentalorgansandmilitaryunitsfortheirownuse;landoccupiedbyinstitutionsfortheirownusewhicharefinancedbythefundsfromtheState;landoccupiedbyreligioustemples,parksandhistoricscenicspotsfortheirownuse;squaresandgreenlandandlandforotherpublicuseoccupiedbymunicipaladministration;landdirectlyutilizedforagriculturalproduction,forestry,animalhusbandryandfisheryindustries;landusedforwaterreservationandprotection;andlandoccupiedforenergyandtransportationdevelopmentuponapprovaloftheState.SummaryTherearecurrently17differenttypesoftaxinChina,namely,⑴value-addedtax,⑵consumptiontax,⑶tobaccotax,⑷enterpriseincometax,⑸individualincometax,⑹resourcetax,⑺urbanandtownshiplandusetax,