Stamp tax is imposed on the entities and individuals executing or accepting the taxable instruments specified in tax laws during the economic activities and exchanges. In terms of the stamp tax, the tax amount payable shall be calculated at different proportionate tax rates in respect of the contract price or on the basis of a fixed amount per instrument, in the light of the nature of the taxable instruments.
There are four levels of proportionate tax rates, i.e. 1‰, 0.5‰, 0.3‰and 0.05‰. For instance, in terms of purchase and sale contract, the proportionate tax rate is 0.3‰ of the value of the purchase and sale; in terms of processing contract, 0.5‰of processing fee or contracted receipts; in terms of property leasing contract, 1‰ of the lease amount; in terms of loan contract, 0.05‰ of the loan amount. In terms of the license or permit, a fixed amount of RMB 5‰ shall be paid for each instrument.
Stamp tax shall be paid in a manner that taxpayers shall, in accordance with the provisions, calculate the tax amount payable, purchase and affix at one time the full corresponding amount of tax stamps. In terms of the equity transfer instrument, the stamp tax shall be respectively paid by the parties to such instrument at the rate of 3‰ in respect of the amount calculated on the basis of the actual transaction price on the securities market upon the date of execution of such instrument.
The taxpayers of Stamp Tax include any enterprise, unit, individual household business operators and other individual who executes or receives specified economic documents within the territory of China.
Taxable items and tax rates
|Taxable items||Tax rates (tax amount)|
|1.||Purchase / sale contracts||0.03%|
|3.||Survey arid design contracts for engineering and construction projects||0.05%|
|4.||Construction installation and engineering contracts||0.03%|
|5.||Property, leasing contracts||0.1%|
|6.||Goods transportation contracts||0.05%|
|9.||Property insurance contracts||0.1%|
|11.||Property title transfer documents||0.05%|
|12.|| Business accounting documents|
(1) Capital recording documents
(2) Other accounting documents
|13.||Permits and licenses||5 Yuan/piece|
The computation of Stamp Tax is based on the amount of payment, fees or receipts listed on the taxable documents or the number of pieces of the taxable documents by using the applicable tax rate listed in the Schedule of Stamp Tax Taxable Items and by applying the applicable tax rate or amount of tax per unit.
The formula for computation is:
- Tax payable = Amount of payment (or fees, receipt) indicated in taxable documents × Applicable rate, or
- Tax payable = Number of pieces of taxable documents × Tax amount per Unit
Tax exemptions may be granted on duplicates or copies of documents on which Stamp Tax has already been paid; documents executed when property is donated to the government, social welfare units supporting the widowed, the aged, the injured and the handicapped, or schools; non-interest bearing or discounting loan contracts; preferential loan contracts concluded between foreign governments or international financial institutions and the Chinese government or State financial institutions; and insurance contracts for agriculture and forestry products, and animals in animal husbandry.
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