Business tax is a kind of turnover tax levied on the revenue generated from the provision of taxable services, such as communications and transportation, construction, finance and insurance, posts and telecommunications, culture and sports, entertainment and other Taxable services, as well as the transfer of intangible assets and the sale of immovable properties within the territory of China.
(a) Taxpayer
Payers of business tax are enterprises or individuals engaged in the provision of taxable services, transfer of intangible assets or sale of immovable properties in China.
(b) Taxable Items and Tax Rates
There are nine taxable items for business tax, ranging from 3% (for communications and transportation) to 20% (for entertainment).
(c) Method of Computation
The formula for computing business tax is as follows:
Tax payable = business turnover x applicable tax rate
(d) Tax Liability and Payment Period
The business tax liability arises on the day the taxpayer receives the full amount of business proceeds or obtains a payment voucher for the proceeds. The payment period may be five days, ten days, fifteen days or one month, to be determined by the competent tax authorities.