China VAT Calculator

Nowadays China is trying to reduce the tax burden on taxpayers in order to stimulate economic growth and attract investment into the country.

In may of 2016 the PRC (People Republic of China) government abolished the corporate income tax (business tax) and replaced it with value added tax.

VAT stands for Value Added Tax (chin. 增值稅 - Zēngzhí shuì ).

There is also a program to return the VAT, which is very important for tourists (when buying 500 euros) and for the export of goods from the country.

Depending on the specific activity applies different tax rates.

• general rate is 17%;
• reduced rates are 13%, 11%, 6%, 5%, 3%.

The General rate of 17% is designed to tax the production, sale, import or repair services.

Reduced rate of 13% VAT is paid on the sale of grain and oil; services for the provision of heating and cooling buildings, some of gas suppliers; sale of books, Newspapers and magazines.

Rate of 11% applied to postal and transport services; basic telecommunication services (voice communication); the real estate construction.

6% VAT is applied for consulting services; Information Technology; online services; financial services and insurance; broadcasting; entertainment. Also retail trade, hotel, restaurant and catering services;

5% VAT rate is for real estate transactions.

• 800,000 yuan;
• 500 000 yuan in the production of goods or the repair services;
• 5 million yuan for activities in the service sector
applies a reduced VAT rate of 3%.

In case the activities fall under the General VAT rate, but the monthly turnover for the services or delivery of goods ranges from 5 000 to 20 000 yuan (or 300 -500 yuan per transaction) applies a zero VAT rate (0%) in most provinces of China. This 0% rate is only for individuals. Corporate Businesses always pay VAT.

There is also a zero rate of taxation (VAT 0%) for export of goods and some services.

Agricultural products, contraceptive drugs and devices, antique books, and most of the exported services are exempt from VAT.