Factor Planning Of Enterprise Income Tax Rate

The income earned by foreign invested enterprises and enterprises and establishments established by foreign enterprises in China within the taxable income shall be subject to a 30% proportional tax rate. The local income tax shall be subject to a 3% proportional tax rate according to the taxable income.

The withholding tax applies 20% of the tax rate.

In addition to the above rates, foreign enterprises with foreign investment in special economic zones, foreign enterprises engaged in production and operation in special economic zones and enterprises with foreign investment in economic and technological development zones shall be subject to enterprise income tax at a tax rate of 15%.

The productive foreign investment enterprises in the old urban areas of the coastal economic open area and the cities where the special economic zones and the economic and technological development zones are located shall be subject to enterprise income tax at a tax rate of 24%.

In the old urban areas where the coastal economic open area and the special economic zones and the economic and technological development zones are located, or those of foreign investment enterprises in other areas under the State Council, which belong to energy, pportation, ports, wharfs or other projects encouraged by the state, the enterprise income tax can be levied at a tax rate of 15%, and the specific measures shall be formulated by the State Council.

The tax rate is the core of the tax law. On the whole, the new tax law has not increased the tax commitment and the preferential tax policy has not decreased.

From the applicable tax rate, the tax rate stipulated by the new tax law has kept the tax rate of the original Sino foreign joint venture enterprise income tax.

For taxpayers who pay taxes for foreign enterprises, the excess tax rate will be changed to 33% of the tax rate. The actual burden will increase or decrease. However, most taxpayers reduce the tax burden and reduce up to 16%. The tax burden of taxpayers who are below 250 thousand yuan in the whole year will increase slightly by three percentage points.

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