Can You Explain the Tax Regime for New Companies in China?

December 29, 2021 | BY

Susan Mok

Guo Yongmao of Haiwen & Partners discusses the various types of taxes under the PRC tax regime that new companies must consider when setting up a business in mainland China and highlights how tax impacts investors of a PRC company if they are foreign entities when considering dividends distribution, interest payment and transfer pricing

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Summary

  • New companies need to consider tax compliance and tax planning matters from the moment they set up their business in mainland China
  • Employees will be subject to individual income tax (IIT), and employers must withhold IIT for the employees
  • Furthermore, if foreign investors invest in the PRC real estate market, among the various taxes, land appreciation tax (LAT) is a very important type of tax for real estate related transactions