According to the Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China, on Comprehensively Promoting the Tax Policies Related to the Reform of Business Tax (Caishui [20 16] No.36), from May 1 6, 2006 to May12006, general taxpayers in the construction industry can adopt differentiated taxation methods. The core of differential taxation is to tax the balance of sales after deducting input tax according to a certain proportion based on the actual profit of the enterprise. Specifically, the general taxpayer in the construction industry can deduct the input tax from the taxable sales, and levy 3% value-added tax on the rest. It should be pointed out that the scope of application of differential taxation method is limited. Only taxpayers who meet the requirements of the state and are recognized by the tax authorities can adopt the method of differential taxation. In addition, for some special industries, such as construction and installation, real estate development, etc., there are certain policy restrictions and requirements, which require taxpayers to implement in accordance with relevant regulations to avoid violations of laws and regulations.
What is the tax rate of differential tax in construction industry? Are there any differences among provinces? The differential tax rate for the construction industry is 3%. According to the provisions of the Ministry of Finance, State Taxation Administration of The People's Republic of China and other departments, when implementing the differential tax policy, the provinces generally do not make individual adjustments to the tax rate, and all of them are implemented according to 3%. However, the specific policies and regulations in different regions may be different, involving specific tax management and policy implementation, and taxpayers need to implement them in accordance with local regulations.
Taxpayers who generally pay taxes in the construction industry may adopt the method of differential taxation. According to the regulations of the Ministry of Finance of People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China, taxpayers can deduct the input tax from taxable sales, and levy 3% value-added tax on the rest. It should be noted that the scope of application of differential taxation methods is limited, and taxpayers should abide by relevant regulations and avoid illegal acts.
Legal basis:
Article 39 of the Value-added Tax Law of People's Republic of China (PRC) * * * The directly related input tax shall be deducted from the price obtained by taxpayers from selling goods, providing taxable services, transferring real estate or selling real estate, and the rest shall be taxable.