China Corporate Tax: Resident and Non-Resident Enterprise

China Corporate Tax 

In Hong Kong, it’s commonly named as Profit Tax. Whereas, taxable income for companies in China are named as Corporate Income Tax. Corporate Income Tax Law in China detailed Implementation Regulations on Taxpayer and Taxable Income.  China’s tax year starts from the first day in the calendar year and ends with the last day in the calendar year.

Hong Kong Limited companies pay profits tax. While unlimited companies are under the personal assessment classification. The same theory applies in Mainland China as well. As well as that, the Sole Proprietorships, Individual Industrial and Commercial Households pay Individual Tax. Whereas, Enterprises pay Corporate Tax. Subsequently, Joint Venture Enterprise pay their tax as per the classification and nature. 


Joint Venture Enterprise Taxable Income

For example, ABC Partnership is 60% owned by DEF Limited Company and 40% owned by Mr. G.

The taxable income for DEF Limited is $60,000

The personal assessment of Mr. G is $40,000

The total taxable income of ABC Joint Venture Enterprise is $100,000 

From the point of view of Taxation. The Enterprises in China are belonging to either Resident Enterprise or Non-Resident Enterprise. 


Differences between Resident and Non-Resident Enterprises 

Resident Enterprises:

  • Enterprises established in China
  • Enterprises established outside China. But business activities in China

Non-Resident Enterprises:

Enterprises both establishment and management are not in China. Still Non-Resident Enterprises have 2 categories:

  • With an institutions or establishments
  • Without an institutions or establishments

In fact, for tax purpose, if the revenue of a Non-Resident Enterprise is generating in China. In conclusion, Non-Resident Enterprise has to pay China Tax. 


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