In the PRC, resident enterprises and non-resident enterprise who pay for enterprise income, shall in accordance with the provisions of the act, subject to corporate income tax. Sole proprietorship, partnership law is not applicable.
Resident enterprise: It refers to those legally established in China, or those in accordance with the jurisdiction of the foreign countries (regions) but the actual management of that enterprises is in China.
For Resident companies, its sources of income from the domestic and foreign income are subject to corporate income tax.
Non-resident enterprise: It refers those enterprises under foreign (regional) law established and its effective management not in China, but in the China territory, establishes a place, or even has no establishment in China or places, but its corporate income are originating from China.
Non-resident enterprises in China has an establishment or place, it shall be of such organization or establishment in the territory with income derived from China as well as occurring outside China but its institutions or establishments effectively connected income, corporate income tax.
Non-resident enterprises without an establishment in China, places, or has set up institutions and places but its incomes are derived within such organization, that has no actual connection, it should be based on their income sources from China to pay corporate income tax.
Corporate income tax rate is 25%.
Non-resident enterprises without an establishment in China, places, or has set up institutions and places but the income derived within such organization, has no actual connection, it should be based on their income sources within China to pay corporate income tax. Its income is charged at the applicable tax rate is 20%.
Chinese mainland tariff is clumsy and complex, the tax burden is not too low. Corporate financial officers shall within the scope as permitted by law, or to the extent not prohibited by law, through the production and business activities of the taxpayer, to make some adjustments and arrangements to minimize the tax burden. This is tax planning.
The basic corporate tax plannings are:-
(A) the use of tax incentives
(B) the use of tax system design
(C) avoid adverse tax burden
(D) the use of tax law "loophole"