4.Turnover_Tax2.ppt

(sale price – buy price) * 5.5% cost Q A: Do you agree with VAT will take place of Business Tax in China in the future? II. Business Tax Levied on specified profit-making cause and business activities. The “Provisional Regulations of the PRC on BT” currently effective in China was promulgated by the State Council on Dec. 13,1993 and effect in on Jan. 1, 1994. BT is administered respectively by Central and local tax bureaus. BT is the major part of local tax. In 2009, BT collected 9013.64 billion yuan, occupied 18.2% of total tax revenue of China. 1. Taxpayers Including all enterprises, units, household business and individuals engaged in provision of taxable service, transfer of intangible assets or in sales of immovable properties within the territory of PRC. taxable service means those business of traffic transportation, construction, finance insurance, post telecommunications, cultural sports, entertainment, and the service industry, etc. 2. taxable items and tax rate Based on different sectors and taxable items, different flat rate are adopted. See table in p67 3. computation of tax payable Tax payable= Turnover * applicable rate example 1 Superwit consulting Co., Ltd. is a wholly foreign-owned enterprise which is engaged in consulting business in China. It earned a business turnover of 250,000 yuan in October,2001, including fee paid in a lump sum and additional charge paid by clients. The taxes payable during the month would be : Taxes payable= 250,000 * 5% = 12,500 yuan Example 2 HT Co., Ltd. Is a transportation company, which realized a business turnover of 5,000,000 yuan in July,2008, and the expenses it paid for the multimodal transportation was 1,000,000 yuan. The taxes payable for this month would be : BT payable= (business turnover - expense) * applicable rate = (5,000,000 – 1,000,000) *3% = 120,000 yuan 4. Major exemptions See p69 New changes For sale of real estate: tax rate 5.5%