China Tax Guide

by Moser, Michael J.; Zee, Winston K.

• ISBN13: 9780195906103
• ISBN10: 0195906101
• Edition: 3rd
• Format: Hardcover
• Copyright: 1999-10-07
• Publisher: Oxford University Press

Summary

Since 1991, when the People's Republic of China substantially revamped its tax regime applicable to foreign companies and foreign investment enterprises, China's tax laws have been growing in complexity every year. This new, expanded edition of the China Tax Guide has been fully updated to take account of what is now a unified tax structure for equity joint ventures.

Author Biography

Michael J. Moser is a partner with the international law firm of Baker & McKenzie.

Table of Contents

Preface	vi
Tables and Figures	xi
Introduction	1	(14)
Scope	1	(1)
Background	1	(1)
The Taxes	2	(3)
Applications	5	(2)
Tax Legislation	7	(1)
Administration	8	(4)
Tax Planning	12	(3)
Forms of Doing Business in China	15	(14)
Introduction	15	(1)
Sales and Purchases	15	(1)
Compensation Trade and Processing and Assembly Operations	16	(1)
Foreign Financial Institutions and Financing in China	17	(1)
Technology Licensing	18	(1)
Consignment Sales Arrangements and Service Centres	18	(1)
Representative Offices	19	(1)
Contracted Projects	19	(1)
Cooperative Business Arrangements	20	(1)
Equity Joint Ventures	21	(2)
Limited Liability Companies and Joint Stock Companies	23	(1)
Wholly Foreign-Owned Enterprises	24	(1)
Holding Companies	24	(1)
Enterprises in Special Investment Areas	25	(1)
Bonded Zones	25	(1)
Overseas Chinese and Hong Kong, Macao, and Taiwan Compatriots	26	(3)
The Individual Income Tax	29	(24)
Introduction	29	(1)
Taxpayers	29	(7)
Income	36	(6)
The Calculation of Tax	42	(5)
Reporting and Payment Requirements	47	(2)
Enforcement	49	(1)
Tax Credit	50	(3)
The Foreign Enterprise Income Tax	53	(33)
Introduction	53	(1)
Scope	53	(1)
Foreign Investment Enterprises	54	(20)
Foreign Companies with Establishments in China	74	(6)
Foreign Companies without Establishments in China	80	(6)
Domestic Enterprise Income Tax	86	(6)
Introduction	86	(1)
Scope	86	(1)
Taxable Income	87	(1)
The Calculation of Taxable Income	87	(3)
Tax Rates	90	(1)
Reductions and Exemptions	91	(1)
Tax Credit	91	(1)
Payment	91	(1)
Turnover Taxes	92	(28)
Introduction	92	(1)
The Value Added Tax	92	(17)
Business Tax	109	(7)
Consumption Tax	116	(4)
Land Value Added Tax	120	(13)
Introduction	120	(1)
Scope	120	(1)
Calcutation	121	(6)
Exemptions and Reductions	127	(2)
Payment	129	(1)
Penalties	130	(1)
Implementation	130	(1)
Administration	131	(1)
Local Government	131	(2)
Deed Tax	133	(8)
Introduction	133	(1)
Scope	133	(2)
Reductions and Exemptions	135	(1)
Rates	136	(1)
Calculation	137	(1)
Payment	138	(1)
Administration	139	(1)
Penalties	140	(1)
The Real Estate Tax	141	(2)
Introduction	141	(1)
Scope	141	(1)
Tax Assessment and Payment	141	(1)
Exemptions	142	(1)
The Vehicle and Vessel Licence Tax	143	(2)
Introduction	143	(1)
Scope	143	(1)
Tax Rates	143	(2)
The Stamp Tax	145	(11)
Introduction	145	(1)
The Nature and Scope of the Stamp Tax	145	(1)
Execution Outside China	146	(1)
Exemption	146	(6)
Reduction in the Stamp Tax	152	(1)
Payment	153	(1)
Enforcement	154	(1)
Outstanding Issues	155	(1)
Customs Duties and Related Taxes	156	(16)
Introduction	156	(1)
Import and Export Restrictions	157	(1)
Customs Duties	158	(3)
Payment and Administration	161	(1)
Reductions and Exemptions	162	(10)
Taxation in China's Special Investment Areas	172	(12)
Introduction	172	(1)
The Special Economic Zones	172	(3)
The Fourteen Coastal Cities	175	(1)
The Hainan Special Economic Zone	176	(1)
The Pudong New Area	177	(1)
The Coastal Open Economic Zones	178	(1)
The High and New Technology Industrial Development Zones	179	(1)
The Special Investment Area in Beijing	180	(1)
Bonded Zones	181	(1)
The Availability of Tax Benefits	181	(1)
State Council Approval	182	(2)
Tax Treaties	184	(12)
Introduction	184	(1)
The Nature of a Tax Treaty	184	(1)
The Tax Treaty between China and the United States	185	(1)
The Scope of the Treaty	186	(1)
Taxation Based on the Activities of the Taxpayer	187	(2)
Taxation Based on the Source of the Income	189	(1)
The Elimination of Double Taxation	190	(1)
Non-Discrimination	191	(1)
The Effects of the Treaty on Specific Transactions	191	(2)
Conclusion	193	(3)
The Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation	196	(13)
Introduction	196	(4)
Scope of the Arrangement	200	(2)
Taxable Activities	202	(4)
Method of Eliminating Double Taxation	206	(1)
Consultation	207	(2)
Transactional Applications	209	(19)
Introduction	209	(1)
Sales and Purchases	209	(1)
Compensation Trade and Processing and Assembly Operations	210	(2)
Financing Transactions	212	(1)
Technology Transfer	213	(4)
Consignment Sales and Service Centers	217	(1)
Branches	218	(1)
Representative Offices	219	(1)
Contracted Projects	219	(3)
Cooperative Joint Ventures	222	(1)
Equity Joint Ventures	223	(1)
Wholly Foreign-Owned Enterprises	224	(1)
Holding Companies	225	(3)
List of Appendices	228	(2)
Appendix 1. Comparative Chart of Chinese-Foreign Tax Treaties	230	(9)
Appendix 2. Specimens of Tax Forms	239	(21)
Appendix 3. Selected Legislation	260	(151)
Index	411