Online Calculators since 2009
The business tax is imposed on the entity and individual engaged in providing taxable services, transferring intangible assets or selling immovable property within China. The taxable services cover 7 tax items, such as transportation industry, building industry, and finance and insurance industry.
The business tax payable shall be calculated on the basis of the business turnover, amount of transfer or sales volume in respect of the taxable services or taxable activities at the statutory tax rate. The tax rate applicable to entertainment industry is 20%, except that the tax rate applicable to the billiards clubs and bowling halls in such industry is 5%; the tax rate applicable to all the other tax items is 3% or 5%. The prescribed time limit for paying business tax is the same as those for VAT and consumption tax.
Companies providing services in China are subject to Business Tax, which is a sales tax on the price on the service. Unlike VAT or GST, it is not deductible against onward sales to other businesses, and so cascades/compounds through B2B (Business To Business) sales.
Chinese Business Tax operates alongside Chinese VAT, which is charged on goods.
There is a major reform of Chinese VAT underway following the launch of a successful VAT pilot in Shanghai in 2012. The plan is to withdraw Service Tax, and replace it with VAT by the end of 2015 (and onwards into 2016)
The following services provided with the People's Republic of China are subject to Business Tax.
Services provided from outside of China to a Chinese-resident company are still subject to Business Tax. It is either the responsibility of the supplier's agent or the customer to account for the tax.
|Taxable items||Tax rates|
|Communications and transportation||3%|
|Financial and insurance businesses||8%|
|Post and tele-communication||3%|
|Culture and sports||3%|
|Transfer of intangible assets||5%|
|Sales of immovable properties||5%|
The amount of Business Tax payable is equal to the turnover times the applicable tax rate. The computing formula is:
Tax payable = Turnover × Applicable tax rate
Business Tax may be exempt for: