The tax basis of cultural construction fee is the income of advertising business. That is, the balance after deducting the tax-included advertising fees paid to other advertising companies or publishers from all the tax-included prices and out-of-price expenses obtained for taxpayers to provide advertising services. Units and individuals that pay the construction fee for cultural undertakings shall calculate the payable amount at the rate of 3% of the sales obtained by providing VAT taxable services, and the State Taxation Bureau and the Local Taxation Bureau shall collect the VAT for advertising services and the business tax for entertainment respectively.

What are the requirements for the construction cost?

The construction fee for cultural undertakings is for the State Council to further improve its cultural and economic policies and expand the investment channels for cultural undertakings.

(1) Entertainment industry. Including karaoke bars, dance halls, karaoke dance halls, music cafes, billiards, golf, bowling, entertainment, Internet cafes, bars and so on.

(2) advertising. Refers to the use of radio stations, television stations (movies, television), newspapers and magazines, light boxes, signs and other forms of publicity of goods or business services and the provision of related services. Units and individuals that pay the construction fees for cultural undertakings shall calculate the payable amount at the rate of 3% of the sales obtained by providing VAT taxable services.

According to the relevant laws of China, advertising media units and outdoor advertising business units that provide advertising services in the People's Republic of China and China shall pay the construction fee for cultural undertakings in accordance with the provisions of this notice.

The tax basis of cultural construction fee is according to the relevant laws and regulations, and the tax basis of cultural construction fee is the income of advertising business; That is, the balance after deducting the tax-included advertising fees paid to other advertising companies or publishers from all the tax-included prices and out-of-price expenses obtained for taxpayers to provide advertising services. Where the payer deducts the price, he shall obtain the special VAT invoice or other legal and valid documents stipulated by State Taxation Administration of The People's Republic of China, otherwise, it shall not be deducted.

To sum up, we should pay taxes in accordance with the law, and the tax basis of cultural construction fees is actually the payable amount that should be calculated according to the paid sales and 3% rate of advertising services.

Legal basis: Interim Measures for the Administration of Collection of Construction Fees for Cultural Undertakings Article 2 Units and individuals that pay business taxes on entertainment and advertising industries within the territory of the People's Republic of China in accordance with the Provisional Regulations of the People's Republic of China on Business Tax shall be the obligors for the payment of construction fees for cultural undertakings (hereinafter referred to as payers) and shall pay the construction fees for cultural undertakings in accordance with the provisions of these Measures.

Article 4 The construction fee for cultural undertakings shall be calculated according to the turnover of business tax payable by the payer for entertainment and advertising and the prescribed rate. Calculation formula:

Payable amount = turnover of business tax payable for entertainment industry and advertising industry × 3%