Corporate Income Tax

• Introduction
• Tax for resident and non-resident companies
• Legal Texts
• Tax incentives
• Related Party and Transfer Pricing Documentation

 

---

 

 

Introduction

 

China is both a residence jurisdiction and a source jurisdiction. Corporations (companies and enterprises) set up in China or managed in China are tax residents, and they are subject to tax on worldwide income. Foreign corporattions (companies and enterprises) are non-tax residents. They are subject to income tax on China-source income.

 

Income Tax For Resident and Non-resident Enterprises

 

Non-resident companies are divided into two categories: non-resident companies that have set up a permanent establishment in China; non-resident companies that do not have a permanent establishment, but they derive China-source income from within China.

 

Regarding the tax on resident and non-resident companies, please read [Read].

 

---

 

Legal Texts

•         Income Tax For Foreign Investment Enterprises and Foreign Enterprises (repealed on 31st December 2007) [Read]
•         PRC Enterprise Income Tax Law, effective on 2008.1.1 (Bilingual) [Read]
•         Government Officials replied to news reporters on questions on Enterprises Income Tax Law (Bilingual) [Read]
•         Tax Officials Elaborate on PRC Income Tax Regulations (Bilingual) [Read]
•         Grandfathering preferential policies, State Council decree no (2007) 39 (Bilingual) [Read]
•         Tax preferences for newly set up high-tech enterprises in Shenzhen and Shanghai Pudong new area, State Council decree no (2007) 40 (Bilingual) [Read]
•         Questions & Answers on 2008 PRC Enterprise Income Tax Law (Part I) --- About 'Revenue' (Bilingual) [Read]
•         Questions & Answers on 2008 PRC Enterprise Income Tax Law (Part II) --- About 'Deduction' (Bilingual) [Read]
•         Tax Incentive Provisions of the PRC Enterprise Income Tax Law and the Implementation Regulations [Read]

 

---

 

 

Tax incentive

Foreign Investment Enterprises are given tax incentive on re-invested profits, effective on 1st Jan 2017 [Read]

 

 

Related Party and Transfer Pricing

On 29^th June 2016, State Administration of Taxation (SAT) issued Bulletin [2016] No. 42 (Bulletin 42), which updates China’s transfer pricing compliance requirements, including both contemporaneous documentation and tax return reporting forms. [Read]