Corporate income tax is a tax levied on the production and operation income and other income of domestic enterprises and business units in China. Taxpayers of corporate income tax include all People's Republic of China and domestic-funded enterprises or other organizations within the country that implement independent economic accounting, that is, state-owned enterprises, collective enterprises, private enterprises, joint ventures, joint-stock enterprises, income from production and operation and other income of other organizations.

The "Enterprise Income Tax Law" stipulates:

Chapter 1 General Provisions

Article 1 Within the territory of the People's Republic of China, enterprises and other income The organization (hereinafter collectively referred to as the enterprise) is a taxpayer of corporate income tax and shall pay corporate income tax in accordance with the provisions of this Law.

This law does not apply to sole proprietorships and partnerships.

Article 2 Enterprises are divided into resident enterprises and non-resident enterprises.

Resident enterprises as mentioned in this Law refer to enterprises established in China in accordance with the law, or enterprises established in accordance with the laws of foreign countries (regions) but with actual management institutions in China.

The term “non-resident enterprise” as mentioned in this Law refers to an enterprise that is established in accordance with the laws of a foreign country (region) and whose actual management agency is not in China, but has established institutions and places in China, or has no institutions or places in China. premises, but there are enterprises with income derived from China.

Article 3 Resident enterprises shall pay corporate income tax on their income sourced within and outside China.

If a non-resident enterprise establishes an institution or place in China, it shall be responsible for the income derived from the institution or place it establishes from within China, as well as the income that occurs outside China but is actually related to the institution or place it establishes. Contact income is subject to corporate income tax.

If a non-resident enterprise has not established an institution or place in China, or if it has established an institution or place but the income obtained has no actual connection with the institution or place it has established, it shall treat its income derived from China as Pay corporate income tax.

Article 4 The corporate income tax rate is 25%.

When a non-resident enterprise obtains the income specified in paragraph 3 of Article 3 of this Law, the applicable tax rate is 20%.

Chapter 2 Taxable Income

Article 5 The total income of an enterprise in each tax year, minus non-taxable income, tax-free income, various deductions and allowable compensation The balance after losses in previous years is taxable income.

Article 6 The income obtained by an enterprise from various sources in monetary and non-monetary forms shall be the total income. Including:

(1) Income from the sale of goods;

(2) Income from the provision of labor services;

(3) Income from the transfer of property;

(4) Dividends, dividends and other equity investment income;

(5) Interest income;

(6) Rental income;

(7) Franchise Income from royalties;

(8) Income from donations;

(9) Other income.

The following income in the total income of Article 7 is non-taxable income:

(1) Fiscal appropriation;

(2) Collected in accordance with the law and included in the fiscal Administrative fees and government funds managed;

(3) Other non-taxable income stipulated by the State Council.

Article 8 The actual and reasonable expenses incurred by an enterprise related to obtaining income, including costs, fees, taxes, losses and other expenses, are allowed to be deducted when calculating taxable income.

Article 9 Public welfare donation expenditures incurred by an enterprise, within 12% of the total annual profits, are allowed to be deducted when calculating taxable income.

Article 10 When calculating taxable income, the following expenditures shall not be deducted:

(1) Dividends, dividends and other equity investment income paid to investors;

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(2) Corporate income tax;

(3) Tax late payment fees;

(4) Fines, fines and losses of confiscated property;

(5) Donation expenditures other than those stipulated in Article 9 of this Law;

(6) Sponsorship expenditures;

(7) Unapproved reserve fund expenditures;

(8) Other expenses not related to obtaining income.

Article 11 When calculating taxable income, the depreciation of fixed assets calculated by the enterprise in accordance with regulations shall be deducted.

The following fixed assets are not allowed to calculate depreciation deductions:

(1) Fixed assets other than houses and buildings that have not been put into use;

(2) Operating leases Fixed assets leased in the form of financial lease;

(3) Fixed assets leased in the form of financial lease;

(4) Fixed assets that have been fully depreciated and are still in use;< /p>

(5) Fixed assets unrelated to business activities;

(6) Land that is separately valued and recorded as fixed assets;

(7) Other depreciation shall not be calculated Deducted fixed assets.

Article 2 When calculating taxable income, the amortization expenses of intangible assets calculated by the enterprise in accordance with regulations are allowed to be deducted.

The following intangible assets are not allowed to be deducted from amortization expenses:

(1) Intangible assets for which self-developed expenditure has been deducted when calculating taxable income;

(2) Self-generated goodwill;

(3) Intangible assets unrelated to operating activities;

(4) Other intangible assets that cannot be calculated and deducted from amortization expenses.

Article 13 When calculating taxable income, the following expenditures incurred by an enterprise shall be treated as long-term deferred expenses and amortized in accordance with regulations, and shall be deducted:

(1) Renovation expenditures for fixed assets with full depreciation;

(2) Renovation expenditures for leased fixed assets;

(3) Major repair expenditures for fixed assets;

(4) Other expenses that should be treated as long-term prepaid expenses.

Article 14 During the period of an enterprise’s overseas investment, the cost of investment assets shall not be deducted when calculating taxable income.

Article 15 When an enterprise uses or sells inventory, the inventory cost calculated in accordance with regulations is allowed to be deducted when calculating taxable income.

Article 16 When an enterprise transfers assets, the net value of the assets is allowed to be deducted when calculating taxable income.

Article 17 When an enterprise calculates and pays corporate income tax on a consolidated basis, the losses of its overseas business entities shall not be offset against the profits of its domestic business entities.

Article 18 Losses incurred by an enterprise during the tax year are allowed to be carried forward to subsequent years and made up with the income of subsequent years, but the carry-forward period shall not exceed five years.

Article 19 When a non-resident enterprise obtains the income specified in paragraph 3 of Article 3 of this Law, its taxable income shall be calculated according to the following methods:

(1) Dividends and bonuses Income from equity investments and income from interest, rent, and royalties shall be based on the full amount of the income as taxable income;

(2) Income from the transfer of property shall be based on the full amount of income minus the net value of the property. The balance is the taxable income;

(3) For other income, the taxable income shall be calculated by referring to the methods specified in the first two items.

Article 20 The specific scope and standards of income and deductions and the specific tax treatment methods for assets specified in this chapter shall be prescribed by the financial and taxation authorities of the State Council.

Article 21 When calculating taxable income, if the enterprise's financial and accounting treatment methods are inconsistent with the provisions of tax laws and administrative regulations, the calculation shall be carried out in accordance with the provisions of tax laws and administrative regulations.

Chapter 3 Tax Payable

Article 22 The taxable income of an enterprise shall be multiplied by the applicable tax rate, minus the deductions and credits in accordance with the provisions of this Law on tax preferences. The balance after the tax amount is the tax payable.

Article 23 The amount of income tax paid overseas on the following income obtained by an enterprise can be deducted from its current tax payable. The credit limit is the tax payable calculated in accordance with the provisions of this law. Tax amount; the portion exceeding the credit limit can be offset in the next five years by using the balance of the annual tax credit limit to deduct the tax deductible for that year:

(1) Resident enterprises originating from China Overseas taxable income;

(2) A non-resident enterprise establishes an institution or place in China and obtains taxable income that occurs outside China but is actually connected with the institution or place.

Article 24: Dividends, dividends and other equity investment income derived from foreign sources outside China that a resident enterprise receives from a foreign enterprise that it directly or indirectly controls shall be included in the amount of income tax actually paid by the foreign enterprise abroad. The portion of this income burden can be used as the tax deductible for foreign income tax of the resident enterprise, and can be deducted within the credit limit stipulated in Article 23 of this Law.

Chapter 4 Tax Preferences

Article 25 The state provides corporate income tax preferences to industries and projects that are supported and encouraged to develop.

Article 26 The following income of an enterprise is tax-free income:

(1) Interest income on national debt;

(2) Among qualified resident enterprises Dividends, bonuses and other equity investment income;

(3) Non-resident enterprises that have established institutions or places in China obtain dividends, bonuses and other rights and interests from resident enterprises that are actually connected with the institutions or places. Investment income;

(4) Income of qualified non-profit organizations.

Article 27 The following income of enterprises can be exempted from or reduced from corporate income tax:

(1) Income from agriculture, forestry, animal husbandry and fishery projects;

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(2) Income from investment and operation of public infrastructure projects supported by the state;

(3) Income from qualified environmental protection, energy and water conservation projects;< /p>

(4) Income from qualified technology transfer;

(5) Income specified in paragraph 3 of Article 3 of this Law.

Article 28 Qualified small and low-profit enterprises shall be levied corporate income tax at a reduced rate of 20%.

High-tech enterprises that need key support from the state are levied a reduced corporate income tax rate of 15%.

Article 29 The self-government organs of ethnic autonomous areas may decide to reduce or exempt the portion of corporate income tax payable by enterprises in their own ethnic autonomous areas that belongs to the local share.

If an autonomous prefecture or autonomous county decides to reduce or exempt taxes, it must be reported to the people's government of the province, autonomous region or municipality directly under the Central Government for approval.

Article 30 The following expenditures of an enterprise can be deducted in addition when calculating taxable income:

(1) Research on the development of new technologies, new products, and new processes Development expenses;

(2) Wages paid for the resettlement of disabled persons and other employed persons encouraged by the state.

Article 31 If a venture capital enterprise engages in venture capital investment that needs to be supported and encouraged by the state, it can deduct a certain proportion of the investment amount from its taxable income.

Article 32 If an enterprise’s fixed assets really need to be depreciated at an accelerated rate due to technological progress or other reasons, the depreciation period may be shortened or the method of accelerated depreciation may be adopted.

Article 33: The income earned by an enterprise from comprehensive utilization of resources to produce products that comply with national industrial policies may be deducted from the income when calculating taxable income.

Article 34: The amount of investment invested by enterprises in purchasing special equipment for environmental protection, energy and water conservation, production safety, etc. can be tax deducted according to a certain proportion.

Article 35 The specific measures for tax incentives stipulated in this Law shall be prescribed by the State Council.

Article 36 According to the needs of national economic and social development, or due to emergencies and other reasons that have a significant impact on the business activities of enterprises, the State Council may formulate special preferential corporate income tax policies and report them to the National People's Representative Recorded by the Standing Committee of the General Assembly.

Chapter 5 Withholding at Source

Article 37 The income tax payable by non-resident enterprises on the income specified in paragraph 3 of Article 3 of this Law shall be withheld at source. , with the payer as the withholding agent. The tax shall be withheld by the withholding agent from the amount paid or due for payment each time it is paid or due for payment.

Article 38 For income tax payable by non-resident enterprises from engineering operations and labor services in China, the tax authorities may designate the payer of the project price or labor service fees as the withholding agent.

Article 39 If the withholding agent fails to withhold the income tax that should be withheld in accordance with the provisions of Articles 37 and 38 of this Law or is unable to perform the withholding obligation, the withholding agent shall Taxpayers pay where the income occurs. If a taxpayer fails to pay in accordance with the law, the tax authorities may recover the tax payable from the payer of the taxpayer's other income items in China.

Article 40 The tax withheld by the withholding agent each time shall be paid to the state treasury within seven days from the date of withholding, and a withholding corporate income tax report form shall be submitted to the local tax authority. .

Chapter 6 Special Tax Adjustments

Article 41 Business transactions between an enterprise and its affiliates do not comply with the principle of arm's length transactions and reduce the taxable income of the enterprise or its affiliates or income, the tax authorities have the right to adjust according to reasonable methods.

The costs incurred when an enterprise and its related parties jointly develop or transfer intangible assets, or jointly provide or receive labor services, shall be allocated in accordance with the arm's length principle when calculating taxable income.

Article 42 An enterprise may propose to the tax authorities the pricing principles and calculation methods for business transactions with its related parties, and the tax authorities will reach an advance pricing arrangement with the enterprise after negotiation and confirmation.

Article 43 When an enterprise submits its annual corporate income tax return to the tax authorities, it shall attach an annual related business transaction report form regarding its business transactions with related parties.

When the tax authorities conduct related-party business investigations, enterprises and their related parties, as well as other companies related to the related-party business investigation, shall provide relevant information in accordance with regulations.

Article 44 If an enterprise fails to provide information on its business dealings with its related parties, or provides false or incomplete information that fails to truly reflect its related business dealings, the tax authorities have the right to verify its business dealings in accordance with the law. Taxable income.

Article 45: Enterprises controlled by residents, or controlled by resident enterprises and Chinese residents, are established in countries (regions) where the actual tax burden is significantly lower than the tax rate specified in Article 4, Paragraph 1 of this Law. If an enterprise does not distribute profits or distributes them less due to reasons other than reasonable business needs, the portion of the above-mentioned profits that should be attributed to the resident enterprise shall be included in the current income of the resident enterprise.

Article 46 Interest expenses incurred when the ratio of debt investment to equity investment received by an enterprise from its related parties exceeds the prescribed standard shall not be deducted when calculating taxable income.

Article 47 If an enterprise implements other arrangements that do not have reasonable commercial purposes and thereby reduces its taxable income or income, the tax authorities have the right to make adjustments according to reasonable methods.

Article 48 If the tax authorities make tax adjustments in accordance with the provisions of this chapter and need to pay additional taxes, they shall pay additional taxes and charge interest in accordance with the provisions of the State Council.

Chapter 7 Collection and Management

Article 49: In addition to the provisions of this Law, the collection and management of corporate income tax shall be in accordance with the "Tax Collection and Management Law of the People's Republic of China" Provisions are enforced.

Article 50 Unless otherwise provided by tax laws and administrative regulations, the place of tax payment for a resident enterprise shall be the place where the enterprise is registered; however, if the place of registration is overseas, the place of tax payment shall be the place where the actual management agency is located.

If a resident enterprise establishes a business institution without legal person status in China, it shall calculate and pay corporate income tax on a consolidated basis.

Article 51 When a non-resident enterprise obtains the income specified in paragraph 2 of Article 3 of this Law, the place of taxation shall be the place where the institution or place is located. If a non-resident enterprise establishes two or more institutions and places in China, upon review and approval by the tax authorities, it may choose to have its main institutions and places pay corporate income tax on a consolidated basis.

When a non-resident enterprise obtains income specified in paragraph 3 of Article 3 of this Law, the place of tax payment shall be the place where the withholding agent is located.

Article 52 Unless otherwise provided by the State Council, enterprises shall not pay corporate income tax on a consolidated basis.

Article 53 Corporate income tax is calculated based on the tax year. The tax year begins on January 1 and ends on December 31 of the Gregorian calendar.

If an enterprise opens business or terminates its business activities in the middle of a tax year, so that the actual operating period of the tax year is less than twelve months, the actual operating period shall be regarded as one tax year.

When an enterprise liquidates in accordance with the law, the liquidation period shall be regarded as a tax year.

Article 54 Corporate income tax shall be paid in advance on a monthly or quarterly basis.

Enterprises shall submit prepayment corporate income tax returns to the tax authorities within fifteen days from the end of the month or quarter and prepay the tax.

Enterprises shall submit annual corporate income tax returns to the tax authorities within five months from the end of the year, make final settlements, and settle tax payable and refundable.

When submitting corporate income tax returns, enterprises shall attach financial accounting reports and other relevant materials in accordance with regulations.

Article 55 If an enterprise terminates its business activities in the middle of the year, it shall handle the final settlement of corporate income tax for the current period with the tax authorities within 60 days from the date of actual termination of operations.

Enterprises should declare their liquidation income to the tax authorities and pay corporate income tax in accordance with the law before handling deregistration.

Article 56 Enterprise income tax paid in accordance with this Law shall be calculated in RMB. If the income is calculated in a currency other than RMB, it shall be converted into RMB, calculated and tax paid.

Chapter 8 Supplementary Provisions

Article 57: Enterprises that have been approved for establishment before the promulgation of this Law and enjoy low tax rates in accordance with the tax laws and administrative regulations at that time shall be treated as The State Council stipulates that the tax rate stipulated in this law can be gradually transitioned to the tax rate stipulated in this law within five years after the implementation of this law; those who enjoy regular tax reduction and exemption benefits can continue to enjoy them after the implementation of this law until expiration, but due to no profit For those who have not yet enjoyed the preferential treatment, the preferential period shall be calculated from the year this law is implemented.

Newly established high-tech enterprises that need to be supported by the state in specific regions that are legally established to develop foreign economic cooperation and technological exchanges, as well as in regions where the State Council has stipulated the implementation of special policies for the above-mentioned regions, can enjoy transitional benefits. Tax incentives, specific measures shall be stipulated by the State Council.

Other encouraged enterprises determined by the state can enjoy tax reductions and exemptions in accordance with the provisions of the State Council.

Article 58 If any tax-related agreement concluded between the Government of the People’s Republic of China and a foreign government has different provisions from this Law, the provisions of the agreement shall prevail.

Article 59 The State Council shall formulate implementation regulations in accordance with this Law.