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What Taxes do Foreign-Invested Enterprises Need to Pay in China?

Taxes are definitely a great concern to overseas investors when starting their business in China through our close connection with our foreign clients. If the foreign-invested enterprise don’t pay taxes in accordance with the relevant Chinese tax laws, not only the operation of the enterprise will be challenged, investors themselves may also be at risk. If you have plans to set up an enterprise or you already have company in China, this article can help you better understand the taxes that foreign-invested enterprise need to pay in China.


What Taxes do Foreign-Invested Enterprises Need to Pay in China


1.Enterprise Income Tax


Enterprise Income Tax stipulated in the Enterprise Income Tax Law of the People’s Republic of China requests all enterprise that have incomes and within the territory of China to pay.


The formula for calculating the tax amount payable is:


the payable tax amount=(enterprise incomes-costs)*25%


It’s a good news to small meagre-profit enterprises and the enterprises supported by China government that this two kinds of taxpayers may have preferential tax treatments.


2.Individual Income Tax


Individual Income Tax stipulated in the Individual Income Tax Law of the People’s Republic of China requests a resident individual in China or a non-resident individual obtained income inside China to pay.


There are three formulas for calculating the tax amount payable for different types of incomes: