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TAX REGULATIONS

Xiamen State Taxation Bureau
152 South Hubin Road, Xiamen
Tel: 86-592-2033613 Fax: 86-592-2033613

Xiamen Local Taxation Bureau
200 West Hexiang Road, Xiamen
Tel: 86-592-2116180 Fax: 86-592-2116176

Xiamen taxation authorities include both the State Taxation Bureau and Local Taxation Bureau, while all the taxes of foreign-funded enterprises and foreign enterprises including personal income taxes of foreigners and local employees shall be collected by Xiamen State Taxation Bureau. The Bureau has designated a special division in charge of the management of foreign-related tax policy of the whole city while there are special sections in the Foreign Sub-Bureau and four bureaus at county and district levels to take care of such management within their respective administrative areas.

  1. Income Tax on Enterprises
  2. Value-Added Tax
  3. Consumption Tax
  4. Business Tax
  5. Individual Income Tax
  6. The Vehicle and Vessel Usage License Plate Tax
  7. The Urban Real Estate Tax
  8. Customs Duties


1. Income Tax on Enterprises

The Income Tax on Enterprises is collected at a rate of 15% on the basis of the profits earned during production and operation of enterprises.

The foreign-funded enterprises in the SEZ are exempted from the local income tax.

The productive enterprises scheduled to operate for a period of 10 years or more in industry, transportation (excluding passenger transport), farming, forestry and husbandry, etc. shall be exempted from the income tax for the first two profit-making years and allowed a 50% reduction of income tax in the following three years.

The enterprises scheduled to operate for a period of 15 years or more in construction of harbour and wharfs shall be exempted from income tax in the first five profit-making years and allowed a 50% reduction of income tax in the following five years.

The export-oriented foreign-funded enterprises shall pay the income tax at a reduced rate of only 10% after the expiration of the said period of tax exemption and reduction, if the export values contribute more than 70% of gross output value of the year.

The foreign-funded enterprises with advanced technology shall pay the income tax at a reduced rate of only 10% in the following three years after the expiration of the said period of tax exemption and reduction.

The foreign-funded enterprises in service sector with investment of more than US $ 5 million and scheduled to operate for a period of 10 years or more can apply for tax exemption for the first profit-making year and a 50% reduction for the following two years.

Losses incurred by the foreign-funded enterprises in a tax year may be made up with a corresponding amount drawn from the next year's incomes. Should the incomes in the subse- quent tax year be insufficient to make up for the said losses, the balance may be made up with further deductions from their incomes year by year but within a period of not exceeding five years.

The Income Tax on Enterprises shall be collected on an annual basis and paid in advance in quarterly installments. The enterprises shall file their income tax returns in respect of advance payments within 15 days after the end of each quarter and file the annual income tax returns, together with the statements of final accounts within 4 months after the end of the tax year. The final settlement shall be made within 5 months after the end of each tax year.

All the dividends, interest, rentals, royalties and other incomes arising from the SEZ for businessmen with no establishments in China can enjoy a reduced tax rate of 10% except the tax-free portion prescribed by laws.


2. Value-Added Tax

All the units and individuals with sales of goods or services of processing, repair and re- placement or import of goods shall be the tax payers of the Value-Added Tax (hereinafter called tax payers).

A. The tax rate is 17% for sales or import of goods by tax payers except those prescribed in B and C.

B. The tax rate is 13% for sales or import of the following goods by tax payers.

a. grain and edible vegetable oils;

b. tap water. heating, air conditioning. hot water, coal gas, liquified petroleum gas, natural gas, marsh gas and coal products for civil use;

c. books, newspapers and magazines;

d. feeds, fertilizers and pesticides;

e. other goods prescribed by the State Council.

C. Export goods, except those specially prescribed by the State Council, are exempted from the Value-Added Tax and Consumption Tax.


3. Consumption Tax

All the units and individuals engaged in production, consigned processing and import of the prescribed consumer goods in the People's Republic of China shall be the tax payers of the consumption tax (see table).


4. Business Tax All the units and individuals with taxable service or intangible asset transfer of property sales shall be the tax payers of Business Tax (see table).


5. Individual Income Tax

Schedule of Individual Income Tax Rates
Range of Taxable Income
(yuan/month)
Tax Rate
(%)
below 8005
800 - 2,00010
2,000-5,00015
5,000-20,00020
20,000-40,00025
40,000-60,00030
60,000-80,00035
80,000-100,00040
above 100,00045

The amount of taxble income shall be computed as follows:

For incomes from wages and salaries, a monthly deduction of 800 yuan (an additional 3,200 yuan deduction for foreigners employed by foreign-funded enterprises or foreign enterprises set up in China, and an additional 300 yuan deduction for Chinese employees working at enterprises or institutions in Xiamen) shall be allowed for expenses and that part in excess of 800 yuan shall be taxed. For incomes from remuneration for personal service, contributions, royalties and lease of properties, a deduction of 800 yuan shall be allowed for expenses, if the amount received in a single payment is not exceeding 4,000 yuan; otherwise a deduction of 20% shall be allowed for expenses, and the remaining amount shall then be taxed. For incomes from transfer of properties, the original value of the property and some reasonable amount of expenses shall be deducted and the remaining amount shall then be taxed. Incomes from interests, dividends, bonus, occasional and other incomes shall be taxed on the amount received in each payment.


6. The Vehicle and Vessel Usage License Plate Tax

The tax is collected on the fixed amount on numbers of motor vehicles owned by the enterprises. The annual tax payment ranges from 160 to 320 yuan for each passenger vehicle and 56 yuan per ton for each truck.

Tonnage dues shall be charged by Customs on the motor vessels owned by Sino-foreign joint ventures with the exemption of license plate tax.

The tax shall be paid on a biannual basis and the tax returns be filed within the first month of the each half year.


7. The Urban Real Estate Tax

The tax shall be paid on a biannual basis at an annual rate of 1. 2 % on the net depreciated value of the houses and buildings owned by the enterprises.


8. Customs Duties

Customs duties are collected on the basis of the prices of the import and export goods.

Customs duties are exempted for the invested equipment, building materials imported for the production and operation of the foreign-funded enterprises and the raw and processed materials, primary parts, spare and component parts and packing materials, etc. imported for the actual consumption of the production of export products.

Export products of the foreign-funded enterprises are exempted from export duties, except those restricted by the State.





Business Tax Schedule of Taxable Itens and Tax Rates
Taxable ItemsTax RangeTax Rates
I. Communication & TransportationLand, waterway, air, pipeline transportation,
potage and stevedoring transporation
3%
II. Construction construction, installation, repair, and other
engineering operations
3%
III. Banking & Insurance...5%
IV. Posts and Telecommunications...3%
V. Culture and Sports...3%
VI. EntertainmentBilliard rooms and game houses, singing bars
, dancing halls, Kareoke lounges, music tea
houses, golf courses, bowling alleys
5%
VII. ServiceAgency, hotels, catering, tourism, warehousing,
leasing, advertising and other service sectors
5%
VIII. Transfer intangible assetstransfer of land use rights, franchise, non-patent
rights, trade marks, and copyrights
5%
IX. Property Salesbuildings and other attached objects5%

Consumption Tax Schedule of Taxable Items and Tax Rates
Taxable Items
Tax Rates
A. Cigarettes:
	Class A (including various imported ones)
	Class B
	Cigars
	Cut tobaccos
45%
40%
40%
30%
B. Wines, spirits, and alcohol
	White spirits brewed from grains
	White spirits brewed from potatoes
	Yellow rice wines
	Beer
	Other wines and spirits
	Alcohol
25%
15%
240yn/tn
220 yn/tn
10%
5%
C. Cosmetics (including complete sets)
30%
D. Cosmetics for the skin and hair
17%
E. Precious ornaments and jewelry, stones
(including various gold, silver, jewelry, 
ornaments, and precious stones)
10%
F. Fireworks
15%
G. Petrol
15%
H. Diesel Oil
0.2 yn/lt
I. Car Tires
10%
J. Motorcycles
10%
K. Cars
a. Sedans
	2,200cc or more
	1,000 cc inclusive - 2,200 cc
	below 1,000 cc
b. Four-wheel drive cross-country motor vehicles
	2,400 cc or more
	below 2,400 cc
c. Coaches with less than 22 seats
	2,000 cc or more
	below 2,000 cc
8%
5%
3%
5%
3%
5%
3%



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