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It is important to know the taxation system when you do business in another country. They following provide useful information about China taxation, which may help people who want to do business in China.

Under the current tax system in China, there are 25 types of taxes, which, according to their nature and function, can be divided into the following 8 categories:

a Category of turnover taxes. It includes 3 kinds of taxes, namely, Value - Added Tax, Consumption Tax and Business Tax. The levy of these taxes is normally based on the volume of turnover or sales of the taxpayers in the manufacturing, circulation or service sectors.

b Category of income taxes. It includes Enterprise Income Tax (applicable to such domestic enterprises as state-owned enterprises, collectively-owned enterprises, private enterprises, joint operation enterprises and joint equity enterprises), Income Tax on Enterprises with Foreign Investment and Foreign Enterprises, and Individual Income Tax. These taxes are levied on the basis of the profits gained by producers or dealers, or the income earned by individuals.

c Category of resource taxes. It consists of Resource Tax and Urban and Township Land Use Tax. These taxes are applicable to the exploiters engaged in natural resource exploitation or to the users of urban and township land. These taxes reflect the chargeable use of state-owned natural resources, and aim to adjust the different profits derived by taxpayers who have access to different availability of natural resources.
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