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| The Latest Tax Regulation | |||||||
| Content | Small Scale Taxpayer | ||||||
| Qualification | General Invoice ( fapiao ) | ||||||
| Industries | Service, Trade | ||||||
| Restriction | Yearly turnover less than 5 million RMB | ||||||
| Instance ( RMB ) |
Company's operation records / current month ( oversea transactions, refer to daily foreign exchange rate ). Purchase cost: 100,000 Sales price: 150,000 Installation fee: 20,000 After sales: 10,000 Running expense: 20,000 ( salary, rent, etc. ) |
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| VAT | Income |
trading / sales activities: monthly turnover ( income )*3% engineering / installation: monthly turnover ( income )*3% services / tech. supporting: monthly turnover ( income )*3% ( Can't deduct purchasing VAT ), requirements of tax exemption ( monthly turnover less than 100,000 ) |
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| Instance Analysis | |||||||
| Trading | VAT=150,000*3%=4,500 | ||||||
| After-sales | VAT=10,000*3%=300 | ||||||
| Installation | VAT=20,000*3%=600 | ||||||
| Total VAT | 5,400 | ||||||
| Additional Tax | 5,400*7% or 5,400*11% depending on different situation of preferencial policies. | ||||||
| Preferencial VAT rate: This case ( monthly income less than 100K RMB ), so Income-VAT is zero | |||||||
| Corporate Income Tax | Profits | income(150,000+20,000+10,000)-purchase100,000-running cost 20,000-Income VAT=profits | |||||
| Rate | < 1 million, 5% 1-3 million, 10% >=3 million, 25% | ||||||
| Expense/cost invoice ( fapiao can offset profit, fapiao title must be under corporate name and tax id ) | |||||||
| 1. traffic fapiao ( traveling, catering, hotel, tickets ) etc. | |||||||
| 2. purchasing / transport / fapiao from suppliers. | |||||||
| 3. running cost ( warehouse, rent, adverising, conference, exhibition, marketing, office equipment, communication fee ) etc. | |||||||
| 4. management cost ( welfare, salaries, social insurance, house funding, other benefits ) etc. | |||||||
Posted by: FDIFIRM.com
Author: Mark.Sun
Email: mark.sun@fdifirm.com
Department: Legal Support
Mark Sun provides pre investment consulting of foreign enterprises, and helps foreign brands registering companies, CPA, business registration, Chinese business license application, government annual inspection, visa residents, bank account and related corporate services.
