Value Added Tax

Value added tax is a kind of turnover tax imposed on the newly-increased value; that is, the additional value of goods in various links from commodity production to circulation. All corporations and persons engaged in the sales or importation of goods, provision of processing, repairs and replacement services within the territory of the People’s Republic of China are taxpayers of Value Added Tax (hereinafter referred to as “taxpayers”).

Scope of Charge

  • The sales of goods
  • The provision of processing, repairs and replacement
  • The importation of goods

Basis of Assessment

It is based on the sales amount; that is, all money received from purchasers by taxpayers selling the goods or providing the taxable services.

Tax Rate

Value added tax payers comprise general taxpayers and small-scale taxpayers
  • General taxpayers: standard VAT rate17%, low VAT rate 13%
  • Small-scale taxpayers: VAT rate for commercial enterprises 4%; VAT rate for productive enterprises 6%

Computation of Tax Payable

  • Tax Payable by General Taxpayers=Tax Payable on Sales in Current Period - Tax Payable on Purchase in Current Period, where
  • Tax Payable on Sales means the VAT computed received from the purchasers by the taxpayers selling goods or providing taxable services according to stipulated VAT rate
  • Tax Payable on Purchase means the VAT paid by the taxpayers purchasing goods or accepting taxable services, which in comparison with the foregoing Tax Payable on Sales received by the sellers, is paid by the purchasers.
  • Tax Payable by Small-scale Taxpayers = Tax-including Sales Amount ÷ (1+Tax Rate)× Tax Rate
  • Tax Payable by Taxpayers Exporting Goods = (Dutiable Value +Tariff+Excise Tax) × Tax Rate

Intermediate Links of Taxation

  • Sales link ·Processing linkb ·Import link

Exportation Policies

  • Productive enterprises and foreign-trade enterprises empowered to manage exportation are entitled to free export and refund on their value added taxes
  • Small-scale taxpayers are entitled to free export but no refunds
  • Taxpayers exporting goods restricted by the Country are not entitled to free exports or refunds

Tax Preferences

  • That portion of VAT exceeding 3% of actual tax burdens of the general VAT payers who sell self-produced integrated circuits (IC) and software products will be refunded promptly upon imposition
  • Value added taxes on agricultural products, cereals and oils, coal gas, chemical fertilisers and others are chargeable at the VAT rate of 13%
Stamp Tax Schedule of Tax Items and Tax Rates
Tax Item
Tax Rate
Purchases and sales contracts
Including contracts for purchases and sales
Stamping as 0.03% of the value of the purchase or sale
Undertaking of processing contracts
Including contracts for processing, repair, printing, advertising, testing and so on
Stamping as 0.05% of the income from processing or contracting
Survey and design
contracts for
engineering and
construction projects
Including contracts for survey and design
Stamping as 0.05% of receipts
Construction and
Installation project
Including contracts for contraction and installation undertaking
Stamping as 0.03% of the contracted amount
Property leasing
Including contracts for leasing of houses, motor vehicles, machinery,
equipment and so on
Stamping as 0.1% of the lease amounts
Goods transportation contracts
Including contracts for sea, land and air transportations
Stamping as 0.05% of the transportation fees
Warehousing and
Safekeeping contracts
Including contracts for warehousing and safekeeping
Stamping as 0.01% of the ware
housing and safekeeping fee
Contracts for loan
Including contracts for loan entered by banks and other financial institutions and borrowers
Stamping as 0.005% of the loan amount
Property insurance
Including insurance contracts for property, liability, guarantee, credit
and so on
Stamping as 0.1% of the amount
Technology contracts
Including contracts for technology development and transfer,
consulting, service, and so on
Stamping as 0.03% of the indicated amount
Property transfer
Including transfer documents for property ownership and
copyrights, trademark rights, copyrights, trademark rights,
patents, the right to the use of proprietary technology and so on
Stamping as 0.05% of the amount indicated
Business accounting documents
Account books used for production and business operations
Account books for recording funds:
0.05% of the total amount of the
original value of fixed assets and
self owned working capital; other
account books: RMB 5  for each
Certificates and
Including certificates of title for building, business licenses,
certificates for registration of trade -marks, certificates of patents,
and land use certificates
RMB 5  per document for receiver(s) of the document(s)
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