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.
Business Tax
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.
Personal Tax
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.
OF COURSE TAX RATE IN CHINA IS HIGH
Seems high to me. I think the US corp. income tax rate is about 33%. But big global companies like GE has ways to pay a rate about 15%.
At personal level, the federal income tax is progressive, the tax rate ranges from 5% to 35%, depends on personal income and deductions.
I think one obvious problem in China income tax system is ordinary guys (people who do regular jobs) paid income tax (payroll deduction), while the fat cats (rich guys) don’t necessarily pay their fair share. The collection system and legal system are not there yet.
As to the use of tax payer money, the transparency is improving. For instance, I heard one story the people’s congress hall paid 150,000 Yuan for two toilet rooms renovations :-)
hiahia~~~~~~Jianshuo, you got it, the key point is that “the government collecting the tax but do not provide the service they should.”
Support what you said!!!!
bingo JS, it is high when you consider the service… when this topic arise I always think about the medical facilities here…
The issue of tax is almost a perennial issue.
No one really enjoys paying income tac whether in China, Europe or the U.S.