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These taxes applies to you if you are not free of tax: |
a) Corporate income tax
b) Business tax
c) Individual income tax
d) Stamp duty
e) Any other taxes related to foreign companies |
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Payment Methods |
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(1) Actual Profit Method |
 S hould clearly record revenue and expenses Tax filing should be done as if it is a business enterprise
E.G. Law Firm, Accounting Firm
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(2) Expenses Gross-up Method |
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Taxed based on the expenses incurred instead of the income received
Relatively low tax risk
Mostly tax on RO of foreign enterprises
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(3) Actual Income Method |
Used if cannot be classified as (1) or (2) or tax free office
Should pay taxes if office has revenue
Otherwise, a report describing all the activities during the year needs to be sent to the local tax authority
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(4) Tax Free Method |
RO established by foreign governments, international organizations, not-for-profit organizations, or non-government organizations, etc., can apply for tax free method by submitting application to state tax authority
Yet the application process maybe cumbersome and sufficient documents should be filed properly
here shall be NO business tax and income tax for the representative office. |
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* Your representative office should determine the method in accordance with the business nature of your headquaters and practical situation. |
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* Any Penalities and overdue fines Paid by RO can be excluded in the expenses when calculating income tax under expense gross-up method |
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* Rep offices shall calculate income tax based on actual expenses. *Interest revenue shall not offset thee expenses of the current period |
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* Payment Method Tax Rule |
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Paying Individual income taxes for all his/her global income
- FULL TIME CHIEF REP WITHOUT ANY OTHER JOB TITLES |
Paying Individual income tax for his/her China-sourced income during his/her actual working period in China
- PART-TIME CHIEF REP |
Representative Office Taxes Need To Know
