2023-07-31Introduction to China’s Stamp Duty
The taxable documents mainly include: |
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1. |
Documents issued for purchase and sale transactions, process contracting, property leasing, commodity transportation, storage and custody of goods, loans, property insurance, technology contracts and other documents of a contractual nature |
2. |
Documents of transfer of property title |
3. |
Business books of account |
4. | Documentation of rights or licenses |
5. |
Other documents determined by the Ministry of Finance to be taxable |
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1. |
Duplicates or copies of documents on which stamp duty has already been paid, excluding those used as original ones |
2. |
Documents executed when property is donated to the government, social welfare unit supporting the widowed, the aged, the injured and the handicapped, or schools |
3. |
Agricultural by-product purchase contracts concluded between state designated purchase departments and village committees or individual peasants |
4. |
Non-interest bearing or discounting loans contracts |
5. |
Preferential loans contracts concluded between foreign governments or international financial institutions and the Chinese government or state financial institutions |
Stamp Duty Law of the People’s Republic of China (the “Stamp Duty Law”) was released in November 2018 requesting for the public’s comments, but it hasn’t officially implemented as of now. Compared with the Provisional Rules and the Implementing Rules, the Stamp Duty Law makes following adjustments: |
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1. |
Broaden the scope of taxpayer of stamp duty, “enterprises and individuals trading securities within the territory of China are also the taxpayers of stamp duty”. |
2. |
Further clarify the determination of stamp duty tax basis and computation method of taxable amount. |
3. |
Add exempted taxable documents, “taxable documents executed or received among armies or armed police forces are exempted from stamp duty” and “taxable documents for transfer and lease of housing are exempted from stamp duty payable by individuals (excluding individual household business operators) |
4. |
Add two new categories of stamp duty, “finance leasing contract” and “securities trading” |
5. |
Adjust some applicable tax rates, for instance, decreasing the rate to 0.03% for “processing, construction and transportation contracts”, increasing the rate to 0.1% for “property insurance contracts” and lower down the rate of business accounting books to 0.025% |