INTERNATIONAL TAX Transfer Pricing | Double Tax Treaties
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China Tax Rates
Corporate Tax
Statutory Surtax Local Effective Branch
25% - - 25% 25%

Under the 2007 tax reform, a standard 25% tax rate (down from 33%) applies to both domestic and foreign-funded enterprises. Under certain transition relief rules, enterprises that enjoyed substantially lower than 25% tax rates due to incentives will gradually increase to the new 25% rate over a five-year period.

A 15% tax rate applies to an enterprise that qualifies as a new and high-tech enterprise.

Branches are taxed at the same rates as domestic companies. There is no branch remittance tax.

Withholding Tax
Dividends Interest Royalties
10% 10% 10%

The 2007 reform reduced the 20% statutory dividend withholding rate to 10%. The exemption granted for dividends distributed to foreign investors has not been reinstated, although dividends paid out of pre-2008 earnings continue to be exempt from withholding tax.

The implementing rules for the 2007 tax reform set the withholding tax rate on interest at 10%.

Royalty payments made to foreign enterprises that do not have a PE in China are subject to a 10% withholding tax. Technical or training services provided by a nonresident or technology licensed to a Chinese entity are also subject to the 5% business tax except in the case of royalties paid for the transfer of technology.