China WFOE Corporate Tax service
Hotline: 86-755-82143348, Email:amyhuang@citilinkia.com
The trading WFOE is subject to Value Added Tax ("VAT"), Business Tax ("BT") and Corporate Income Tax ("CIT") Liabilities.
Value Added Tax
There are two types of VAT taxpayers, i.e. General VAT Taxpayer and Small-scale VAT Taxpayer.
The criterion to differentiate between a General VAT Taxpayer and Small-scale VAT Taxpayer is the annual turnover. If the annual turnover of the trading company exceeds RMB 1,800,000, the trading WFOE can apply for General VAT Taxpayer status where the VAT rate is generally 17%. The calculation is based on the difference between input VAT and output VAT. The VAT rate for Small-scale VAT Taxpayers is 6% and there is no tax credit on input VAT. A benefit of a small-scale trading company is that it can apply for a preferential rate of 4% VAT.
A trading WFOE should apply the current month input VAT verification before month-end. It can then prepare the VAT returns and submit to the tax authorities within 10 days after the end of each month. It will need to make VAT payment when the amount of output VAT exceeds the amount of input VAT.
Business Tax
Business tax ("BT") is taxable based on non-VAT revenue. This is normally service revenue. It is calculated using non-VAT revenue multiplied by the business tax rate of the related industry. The WFOE should prepare and submit the business tax return to the tax authorities. It has to make BT payment within 10 days after the end of each month.
Corporate Income Tax
Corporate Income Tax ("CIT", also known as Enterprise Income Tax, "EIT") is based on the profit of the trading WFOE. The trading WFOE should prepare the Corporate Income Tax return every quarter even if its financial result shows a loss. The trading WFOE should submit the Corporate Income Tax return to the tax authorities within 10 days after the end of each quarter. CIT payment is to be made at the same time of the submission for profitable WFOEs.
Contact Us
For further queries, please do not hesitate to contact ATAHK at anytime, anywhere by simply calling China hotline at 86-755-82143348, 86-755-82143512, or emailing to amyhuang@citilinkia.com.