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.
In the “Circular on Taxation Policies Concerning Low-rent Housing, Affordable Housing and Rental Housing (caishui  No. 24),” the Ministry of Finance and State Administration of Taxation offered the following favorable tax treatment to individuals who rent out their houses:
Following Circular No. 24’s main principles and local governments’ recent announcements on increased BT exemption thresholds for individuals, several Chinese cities have released new standards for individual rental tax (IRT) collection. To simplify the tax imposition process, IRT is often collected at a combined rate, which varies along with the amount of rental income.
In Chengdu, the capital city of southwestern Sichuan Province, the combined IRT rates have been adjusted (according to Chengdu Tax Bureau Announcement  No.1) as follows:
Guangzhou, the capital city of southern Guangdong Province, also begun implementing new combined IRT rates at the end of last year:
In Shenzhen, another key coastal city in Guangdong Province, the new combined IRT rates (starting on November 1, 2011) are as follows:
Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China. The firm specializes in assisting foreign enterprises with their tax obligations. For advice, please email firstname.lastname@example.org, visit www.dezshira.com, or download the firm’s brochure here.
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China Lifts Tax-free Thresholds for Business Tax and VAT Collection
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China did impose restrictions on foreigners’ house purchase in 2010. Starting in November 2010, a foreigner can only buy one property for self use, according to national law.
But if a foreigner had purchased properties before the restrictions were put in place and is renting the houses out, he/she’s not breaching the law.
I need an urgent advice for tax planning regarding a purchase of an apartment in Fuzhou. Will gladly pay for consultant. Please call Shai at 150 5916 8331 or email me at email@example.com
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