Free invoice generator and tax tools for China

Companies pay enterprise income tax (企业所得税) at 25% under Article 4 of the Enterprise Income Tax Law. Individuals pay individual income tax (个人所得税): salary, service fees, author's fees and royalties are combined as comprehensive income at 3% to 45%, while a sole trader's (个体工商户) business income is taxed at 5% to 35% (Individual Income Tax Law, Article 3). Interest, dividends, rent and gains on property are taxed at a flat 20%.

Beyond VAT, a small business meets stamp duty on written contracts (Stamp Duty Law, in force since 1 July 2022), urban maintenance and construction tax, property tax, urban land use tax, resource tax, cultivated land occupation tax and the education surcharges. Employers also pay social insurance and the housing provident fund for staff, and must withhold the employees' share from wages.

The most recent reforms are the Value-Added Tax Law, in force since 1 January 2026, and the amended Housing Provident Fund Regulations (State Council Decree No. 844), in force since 20 September 2026.

China has no presumptive turnover tax. Smaller businesses instead get income tax cuts that run to 31 December 2027. A small low-profit enterprise (小型微利企业) is a company outside the restricted industries with annual taxable income of at most RMB 3 million, at most 300 employees and total assets of at most RMB 50 million (MOF/STA Announcement 2022 No. 13). Its taxable income is counted at 25% and taxed at 20% (Announcement 2023 No. 12, item 3). A sole trader with annual taxable income up to RMB 2 million pays half the individual income tax on it. The same announcement halves resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp duty, cultivated land occupation tax and the education surcharges for small-scale VAT taxpayers, small low-profit enterprises and sole traders.