Just get back from the party. We talked about the tax rate in China, and it gave me the impression that the tax rate in China is low.
5% of revenue as operating tax, and 20% of profit – for an Internet company.
For other type, like the trading cmopany, they do not pay according to revenue – they pay value-add tax.
For certified high-tech company, the tax of the first 3 years will be 0, and half of the tax due in the following two years.
Basically it is about 20% for most people, and up to 45% for the rich.
Is it high or low?
My 2 cents: I think the problem for today’s tax structure in China is not how high/low the tax is, it is about the government collecting the tax but do not provide the service they should.