Consumption/VAT/Sales Tax in China
- Nature of the Tax
- Consumption tax
- Standard Rate
- The taxpayers of Consumption Tax include all enterprises, units, household businesses and other individuals engaged in production or importation of taxable consumer goods within the territory of the People's Republic of China. The taxable consumer goods exported by the taxpayers are exempt from Consumption Tax, unless the taxable consumer goods are restricted by the State from exportation. Taxes vary from 0 to 50% (30% on cosmetics, 20 to 45% for tobacco, 5 to 25% for alcoholic drinks, 17% for the personal care products for skin and hair, etc.).
- Reduced Tax Rate
- Preferential rate of 4% or 6% for small companies.
Sale of certain products (running water, books, medicines, newspapers and magazines, certain agricultural products, chemical fertilizers, liquefied gas, coal for domestic use) are taxed at the preferential rate of 13%.
- Exclusion From Taxation
- Exported products are exempt from consumption tax.
- Method of Calculation, Declaration and Settlement
- VAT rate is applicable on volume (taxation by volume) or on the value of the goods (ad valorem taxation).
Payable in RMB at the official rate at the time of import for imported products (at the customs, at the tax office for products manufactured locally).
More information on China Tax.
- Other Consumption Taxes
- There are no additional taxes on consumption in addition to the official consumption tax.
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The Guide to Selling in China gives a comprehensive account of the regulatory requirements in retail, wholesale and foreign trade in China. This chapter is on Taxes Relating to the Sale of Products by Enterprises
Hong Kong Trade Development Council (HKTDC) on 21 Feb 2011 related to Consumption/VAT/Sales Tax in China
Government Trade Promotion, Hong Kong SAR