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FAQs of China Tax
FAQs of Value-added Tax
Can Foreign Investment Enterprise , being small-scale taxpayer , purchase home equipment with VAT refund?
A:
Yes. Home equipment purchased by non-VAT payer, small-scale taxpayer as well as Foreign Investment Enterprise set up in bonded area, in compliance with relevant requirements (GSF (1999) No. 171), can process refund of tax.

Can this company , being retail enterprise with annual turnover about RMB2.1 million , refuse application for the qualification of general taxpayer?
A:
No. According to requirements, enterprise with annual turnover above RMB0.8 million will apply to tax bureau to become general taxpayer.

Can plain invoice credit Input VAT?
A:
No. VAT special invoice recognized by the Tax Law can only credit Output VAT, but the amount of plain invoice can be included in purchase cost.

Can exported goods of small-scale taxpayer be entitled to refund of tax?
A:
According to prevailing policies concerning tax rebates (exemptions) for exported goods, the goods exported by small-scale taxpayer on their own or on consignment shall be free of VAT, consumption tax but without refund.

How can I apply for the qualification of general taxpayer who can issue VAT special invoice?
A:
Application for general taxpayer VAT special invoice shall fulfill the following conditions:
・ Industrial enterprise with annual taxable sales value no less than RMB0.5 million
・ Commercial enterprise with annual taxable sales value no less than RMB0.8 million
・ Enterprise with a sound accounting and auditing system and purchased anti-counterfeiting tax control equipment
 
FAQs of Export Tax Refund
What is the current rate of VAT rebate on exported goods?
A:
Tax refund rate can be differentiated into six categories of 17%, 13%, 11%, 8%, 6%, and 5% according to different goods.

When shall enterprise empowered to manage import/export process export tax rebate (exemption) process confirmation?
A:
Enterprise shall process export tax rebate (exemption) confirmation within 30 days after filing and registration with foreign trade & economic department.

What are the requirements for newly-opened productive enterprise to process "Exemption, Credit and Tax Rebate" for exported goods?
A:
The refundable tax accrued within 12 months from the first export transaction of newly-opened productive enterprise shall be refunded per month but carried forward to next transaction to continue crediting the tax payable on domestic sales. 12 months later, enterprise being small-scale export-oriented enterprise, shall perform as required on small-scale export-oriented enterprise. Enterprise other than small-scale export-oriented enterprise will calculate process "Exemption, Credit and Tax Rebate" per month, except in the two following cases:
・ Enterprise registered more than one year ago which creates new export business (other than small-scale enterprise), after being verified by the municipal tax bureau to be competent of productive capacity and without violation of law, will process "Exemption, Credit and Tax Rebate" per month
・ Newly-opened productive enterprise, whose domestic and export sales value amount to more than RMB5 million and export sales account for more than 50%, will apply to provincial tax bureau for calculation of "Exemption, Credit and Tax Rebate" per month

How can I process "Exemption, Credit and Tax Rebate"? What is the standard of small-scale export-oriented enterprise?
A:
The refundable tax accrued during the year of small-scale export-oriented enterprise with a period of 12 months under review for tax refund, shall not be refunded per month but carried forward to next period to continue crediting the tax payable on domestic sales of goods, and processed refund of tax remaining after crediting at year end in one stroke. 
According to the State Administration of Taxation, the standard of small-scale export-oriented enterprise shall be determined by the State Administration of Taxation of each province in reference to proper reality of each on a basis of the enterprise's domestic and export sales value in aggregate of a taxable year, ranging from RMB2 million to RMB5 million, for example, the standard of small-scale export-oriented enterprise in Guangdong province is below RMB3 million of domestic and export sales value in aggregate.

Can the goods exported by small-scale taxpayer on their own, or on consignment, process export rebates?
A:
The goods exported by small-scale taxpayer on their own or on consignment , shall continue to perform tax-free policy, without crediting or rebating its Input Tax. The goods purchased by export-oriented enterprise from small-scale taxpayer for exportation are permitted tax rebates, if the rate of export rebates is 5%, the rate of rebates will be at 5%; if the rate of export rebates is above 5%, the applicable rate is 6% in any case.
 
FAQs of Individual Income Tax
How to compute Individual Income Tax of Hong Kong resident who supplies services both in China and Hong Kong ?
A:
Hong Kong resident, who works only in mainland and gets paid and need not supply any service back in Hong Kong, shall pay individual income tax on the income earned by supply of service in mainland, whether the income is paid or borne by domestic office or overseas employer (including Hong Kong employer) .

How to compute Individual Income Tax payable by Hong Kong resident who is employed to work in mainland by Hong Kong employer for more or not more than 183 days?
A:
The employee, who stays in mainland consecutively or accumulatively for not more than 183 days, shall pay tax for the number of days staying in mainland in respect of the salary paid or borne by mainland company after computing the tax payable. The portion of salary paid by overseas employer (including Hong Kong employer) shall not be subject to tax. 
The employee, who stays in mainland consecutively or accumulatively for more than 183 days, shall pay tax for the number of days staying in mainland in respect of the total salary received from both mainland company and overseas employer (including Hong Kong employer), after computing the tax payable.

Need foreign national pay Individual Income Tax on director's emolument received in China ?
A:
Yes.

Where shall foreign national pay tax on salary received in China ?
A:
The Individual Income Tax will be declared and paid by the employing enterprise on behalf of the foreign national.

Does the number of days working in China include public holidays?
A:
The number of working days of foreign national employed in China shall include public holidays enjoyed in China .