Taxation in China

Taxes provide the most important revenue source for the Government of the People's Republic of China. As the most important source of fiscal revenue, tax is a key component of macro-economic policy, and greatly affects China's economic and social development. With the changes made since the 1994 tax reform, China has preliminarily set up a streamlined tax system geared to the socialist market economy.

China's tax revenue came to 11.05 trillion yuan (1.8 trillion U.S. dollars) in 2013, up 9.8 percent on 2012. The 2017 the World Bank “Doing Business” rankings estimated that China’s total tax rate for corporations was 68% a percentage of profits through direct and indirect tax. As a percentage of GDP, according to the State Administration of Taxation, overall tax revenues were 30% in China.

The government agency in charge of tax policy is the Ministry of Finance. For tax collection, State Administration of Taxation.

As part of US$586 billion economic stimulus package of November 2008, the government planned to reform the VAT, stating the plan could cut corporation taxes by 120 billion yuan.

Under the current tax system in China, there are 26 types of taxes, which, according to their nature and function, can be divided into the following 8 categories:

State organs that have the authority to formulate tax laws or tax policy include the National People's Congress and its Standing Committee, the State Council, the Ministry of Finance, the State Administration of Taxation, the Tariff and Classification Committee of the State Council, and the General Administration of Customs.

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