29 May 2009
Business tax is a kind of turnover tax levied on the revenue generated from the provision of taxable services, such as communications and transportation, construction, finance and insurance, posts and telecommunications, culture and sports, entertainment and other taxable services, as well as the transfer of intangible assets and the sale of immovable properties within the territory of China.
Payers of business tax are units or individuals engaged in the provision of taxable services, transfer of intangible assets or sale of immovable properties in China.
Taxable Items and Tax Rates
There are nine taxable items for business tax, ranging from 3% to 20% (for entertainment).
Method of Computation
The formula for computing business tax is as follows:
Tax payable = business turnover x applicable tax rate
Tax Liability and Payment Period
Business tax liability arises on the day the taxpayer provides taxable services, transfers intangible assets or sells immovable properties and receives the full amount of business proceeds or obtains a payment voucher for the proceeds.
The period for payment of business tax may be five days, 10 days, 15 days, one month or one quarter, to be determined by the competent tax authorities on the basis of the amount of tax payable. Those who are not able to pay tax according to the fixed time schedule may pay tax on a transaction-by-transaction basis.
For taxpayers who pay tax on a monthly or quarterly basis, they should file tax returns and pay tax within 15 days from the end of the payment period. For taxpayers who pay tax every five days, 10 days or 15 days, they should pay tax in advance within five days from the end of the payment period, and should, within the first 15 days of the following month, file tax returns and settle any outstanding tax payments from the previous month.