If you intend to set up a production-oriented enterprise, you are mainly supposed to pay such taxes as value added tax, corporate income tax, tariff, personal income tax and urban house tax.
If you plan to establish a non-production-oriented enterprise, you shall mainly pay corporate income tax, personal income tax, business tax and urban house tax.
The brief introductions of the taxes are as follows.
Corporate Income Tax (Click to see Corporate Income Tax Law of the People's Republic of China)
The corporate income tax rate for a hi-tech enterprise is 15% and that for the other types of enterprises is 25%.
The procedures for an enterprise to be recognized as a hi-tech enterprise are as follows. An enterprise submits an application to the Hi-Tech Industry Promotion Section of the Science and Technology Development Bureau of TEDA, which will host a preliminary examination. After the application passes the preliminary examination, it will wait for a collective submission to the Science and Technology Development Bureau of TNCD, which will organize a collective examination for recognition. After the application passes the collective examination for recognition, Tianjin Municipal Committee of Science and Technology would issue an accreditation certificate for the hi-tech enterprises of Tianjin.
Value Added Tax
An organization or individual selling merchandise, providing processing, repairing or assembling services or importing goods within the territory of the People's Republic of China shall pay value added tax as required. The basic tax rate of VAT is 17%. A tax payer shall pay VAT at a rate of 13% in selling grain, vegetable cooking oil, tap water, liquefied petroleum gas, natural gas, books, newspapers, magazines, feed, chemical fertilizers, farm machinery, etc.
An organization or individual manufacturing, processing as an entrustee or importing within the territory of China eleven consumer goods, which are tobacco, alcoholic drinks, cosmetics, skin and hair conditioners, precious ornaments and jewels, firecrackers and fireworks, gasoline, diesel, automobile tires, motorcycles and cars, shall pay consumption tax. The consumption tax is computed and paid on either of the following two basis:
1. tax-amount-based computation (¥0.2 for a liter of gasoline or diesel consumed by a car)
2. tax-rate-based computation ( The tax rate for a car with a cylinder capacity of not more than 2,200 milliliter is 8%.)
Business tax is a tax levied on the income originated from selling merchandise or labor services as prescribed in the relevant regulations. The tax rate ranges from 3% to 20%.
Urban House Tax
Urban house tax is a tax levied on real estate properties on the basis of the original value or the market rental value of the property. The tax payer shall be any organization or individual holding a title to real estate.
Urban house tax shall be computed and paid on either of the following two basis:
1. Value-based Computation: The tax shall be computed and paid at a rate of 1.2% according to the remainder after a one-time 30% deduction from the original value of the house, i.e. book value of the self-owned real estate property *1.2%*70%.
2. Rental-based Computation: The tax shall be computed and paid on the basis of 12% of the rentals of the house.
Urban and Township Land Use Tax
A unit or individual who uses land within the boundaries of cities, county towns, towns operating under an organizational system, and industrial and mining districts shall be an obligatory payer of tax on land used within cities and towns (hereinafter referred to as land use tax).
A unit or individual to whom the title to land or houses has been transferred within the territory of the People's Republic of China shall be a title deed tax payer and shall pay deed tax. The transfer of the title to land or houses refers to the following acts. 1. Leasing of the right to use the state-owned lands, excluding the transfer of the right of contractual operations on the collective land in the rural area; 2. Transfer, including sales, donation and exchange of the land use right; 3. House trading; 4. House donation; 5. House exchange.
Currently the rate of deed tax in TEDA is 3%.
Vehicle and Vessel Plate-use Tax
In accordance with the Temporary Regulations on the Vehicle and Vessel Plate-use Tax, a foreign enterprise shall pay vehicle and vessel plate-use tax for the vehicles and vessels it owns or uses.
Since the day upon which an enterprise is established, stamp tax shall be paid for the signing of a contract, agreement or any other legally binding document on the territories of China.
Stamp tax may be paid within a maximum of three years.
Internet or telephone orders are exempt from stamp tax.
Stamp tax shall be collected at the amount of 5% of the total in the document.
Accelerated Depreciation of Fixed Assets
In case the depreciable life of its fixed assets needs shortening for some special reasons, a foreign-funded enterprise in TEDA may file an application, which will incur accelerated depreciation with the examination and approval of the State Taxation Bureau of TEDA.