Six Key Points Regarding China’s Tax Reforms in 2012

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Mar. 9 – According to the “Report on the Implementation of Central and Local Budgets for 2011 and on Draft Central and Local Budgets for 2012” presented to the National People’s Congress on March 5, China’s key tax reforms in 2012 will focus on six specific types of taxes, namely:

  • Property tax (PT)
  • Value-added tax (VAT)
  • Resource tax (RT)
  • Excise tax (ET)
  • Environmental protection tax (EPT)
  • Urban maintenance and construction tax (UMCT).

PT: Possible expansion to more cities
In a move to curb any housing bubble and restrict speculative buying, China begun a pilot PT reform on second home purchases in the municipalities of Shanghai and Chongqing early last year. This year, in addition to advancing such experiments on buying homes, China will also study and design a plan for reforming taxes on owning and selling real estate. Continue reading…

Taxation on Real Estate Rental Income in China

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Including city-specific details on Chengdu, Guangzhou and Shenzhen

Feb. 7 – Both Chinese nationals and a foreign individuals are subject to a combination of taxes on real estate rental income: including individual income tax (IIT), business tax (BT), property tax (PT), urban maintenance and construction tax (UMCT) and an education surcharge (ES).

If simply left to adding up all those rates according to each specific tax law, the taxation on individual rental income would end up pretty high. However, in a move to energize China’s housing supply market, the Chinese government began offering some tax incentives starting in 2008. Continue reading…

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