Taxation in the People's Republic of China

By Jinyan Li | Go to book overview

Stamp Tax

A stamp tax was levied from 1950 to 1958. In 1958, it was incorporated into the Consolidated Industrial and Commercial Tax (CICT), but was reintroduced in 1988. 35 Under the Stamp Tax, all individuals and entities who write or obtain a specified document are liable to the tax. The "specified documents" include contracts for purchase and sale, the undertaking of processing work, the contracting of construction projects, the lease of property, the transportation of goods, storage and custody, the lending of funds, the insurance of property and technology; conveyances; business accounts books; registration certificates for rights and licenses; and other documents determined to be taxable by the Ministry of Finance. Tax rates vary in accordance with the nature of the document. For example, purchase and sale contracts are taxed at 0.003 percent of the sale price; construction and installation contracts are taxed at 0.003 percent of the fee charged; contracts for the undertaking of processing work and for transportation of goods are taxed at 0.005 percent. Taxpayers are required to pay the tax at the applicable rate by purchasing and affixing the tax stamps, which must be pasted on the taxable document. The tax is exempt on duplicates or manuscript copies of documents on which stamp tax has already been paid and instruments written by the owner of property by which such property is donated to the government, a social welfare entity or a school.


BanquetTax

Banquet is a very common in China. It is considered by many as an important social and businesses activity. Chinese banquets tend to be lavish, and the cost per person could quite easily amount to as much as a month's salary. It is therefore normal for the cost to be charged to a public institution, whether it be a state enterprise or a government department. To promote reasonable consumption and discourage waste, a Banquet Tax was introduced in 1988. 36 The taxpayers are entities and individuals who hold banquets in restaurants, hotels, and other catering places. The tax is charged at 15 to 20 percent of the banquet price; where this exceeds 200 to 500 yuan, the exact amount is subject to determination by the local government. The owner or manager of a restaurant or hotel that provides the banquet is required to withhold the tax from the price charged.


NOTES
1.
"Local" government refers here to all governments below the national level. Thus, provincial, municipal, county, and township governments are included unless otherwise specified.
2.
"Bulletin Transmitted by the Chinese Communist Party (CCP) Central Committee and the State Council With Regard to Two Reports Made by the CCP Provincial Committees of Guangdong and Fujian Concerning the Implementation of Special Policies and Flexible"

-146-

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Taxation in the People's Republic of China
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Preface ix
  • 1 - Evolution of China's Tax System 1
  • Notes 26
  • 2 - Taxation of Goods and Services 31
  • Notes 45
  • 3 - Income Taxes on Individuals 51
  • Notes 63
  • 4 - Income Taxes on Domestic Enterprises 69
  • Notes 87
  • 5 - Income Taxes on Foreign Investment 99
  • Notes 116
  • 6 - Agriculture Tax 125
  • Notes 133
  • 7 - Local Taxes 137
  • Notes 146
  • 8 - Evaluation of the Current Tax System and Prospects for Future Reform 151
  • Notes 173
  • Selected Bibliography 177
  • Index 191
  • About the Author 195
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