The amount of tax payable for enterprise corporate income tax is based on the total income of the enterprise, less non-taxable income, tax-exempt income, various deductions, and allowed to make up for the losses of previous years, for taxable income.? The enterprise income tax rate is 25%.? If a non-resident enterprise does not set up an organization or a place in China, or if it does set up an organization or a place but the income it derives is not actually connected with the organization or place it has set up, the tax rate is 20%

According to Article 3 of the Enterprise Income Tax Law of the People's Republic of China, a resident enterprise shall pay the enterprise income tax on the income it derives from sources within or outside China.? A non-resident enterprise that establishes an organization or a place in China shall pay enterprise income tax on the income derived from sources within China and the income that occurs outside China but is effectively connected with the organization or place it establishes.? If a non-resident enterprise does not establish an organization or a place in China, or if it establishes an organization or a place but obtains income that is not physically connected with the organization or place it establishes, it shall pay enterprise income tax on the income derived from within China.

Article 4 The tax rate of the enterprise income tax is 25%.? The applicable tax rate for a non-resident enterprise obtaining the income specified in Paragraph 3 of Article 3 of this Law shall be 20%.?

Article 5 The total income of an enterprise for each taxable year, less non-taxable income, tax-exempted income, various deductions, and losses allowed to be made up for previous years, shall be the taxable income.?

Expanded Information:

The Chinese People's Republic of China (PRC) is the only country in the world where the taxable income of an enterprise for each taxable year is not taxable. p>The People's Republic of China*** and the State Enterprise Income Tax Law Article 6 The income of an enterprise from all sources in monetary and non-monetary form is the gross income. It includes:?

(i) income from the sale of goods;?

(ii) Income from the provision of labor services;?

(iii) income from the transfer of property;?

(iv) Income from equity investments such as dividends and bonuses;?

(v) Interest income;?

(vi) Rental income;?

(vii) royalty income;?

(viii) income from donations;?

(ix) other income.?

Article 7 The following incomes in the gross income are non-taxable incomes:?

(i) financial allocations;?

(2) Administrative fees and governmental funds collected in accordance with the law and included in the financial management;?

(iii) other non-taxable income as stipulated by the State Council.?

Baidu Encyclopedia - Enterprise Income Tax Law of the People's Republic of China and the State of China