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税务知识Part I. Business Tax1. What kinds of business activities performed by resident representative offices of foreign enterprises are subject to Business Tax?(1) Agency trade activities conducted by the representative offices of all kinds of trading corporations, companies and firms;(2) Various service activities conducted by the representative offices of corporations, companies and firms in commercial, legal, taxation and accounting consultancy services; (3) Various services provided by the representative offices of the groups or holding companies for their member companies;(4) Contracted or agency advertising business of the representative offices of advertising companies; (5) Services provided by the representative offices of travel agenciesto tourists (such as visa processing, payment collection, air ticket booking, tour guide and arrangement for accommodation);(6) Investment consultancy or other consultancy services provided by the representative offices of banking and financial institutions other than their core business;(7) Services in all stages of transportation provided to customers by the representative offices of transport enterprises;(8) Various liaison, intermediary and consultancy work performed for other companies in search of cooperative projects in China by the representative offices of foreign investment companies, or various services provided by these representative offices to the joint-venture or cooperative projects of their head offices after such projects have been established;(9) The bidding, liaison and consultancy services provided to other companies by the representative offices in China of foreign contractors, other than the services provided to the engineering projects contracted by the head offices of the above representative offices; and(10) Other taxable activities provided by the representative offices for their customers. 2. What are the methods for calculating Business Tax payable by resident representative offices of foreign enterprises?(1) Taxation based on the actual income With the approval of local tax authority, the amount of Business Tax payable by a resident representative office may be calculated according to its actual income, provided that the representative office can provide all the materials and supporting documents like signed contracts, where the rates of commission are contained therein, and has set up the accounting books for financial revenues and expenditures as well as for cost accounting (of which, the overseas expenditure can be supported with certificate issued by a local CPA). The calculation formula is: The amount of Business Tax payable = commission and handling fee income x 5%(2) Taxation based on deemed incomeWith the approval of local tax authority, the amount of tax payable by a resident representative office may be calculated according to the amount of its deemed income. This is applied when the representative office can only provide all the contracts of its intermediary and agency services within the Chinese territory that fail to specify the amount of commission or involve various business activities of the same office (of which, the amount of commission is specified in some contracts but not in others) and the office cannot provide accurate certification document to correctly declare the amount of income, or cannot provide accurate certificates for costs and expenditures to correctly calculate the amount of taxable income.The calculation formula is: The amount of Business Tax payable = the value of the transaction in the contract × deemed rate of commission × 5%(3) Taxation based on income converted from expenditures To use this method of taxation, the resident representative office should apply with the local tax authority and get approval from all levels of tax authorities above up to the State Administration of Taxation. This method applies to the resident representative offices that provide intermediary and agency services to customers of their headquarters and other enterprises or services to their parent or subsidiary companies (excluding the head office of the resident representative office) but cannot provide the relevant materials and supporting documents like contract and agreement to substantiate their income declaration adequately, or offices that cannot provide accurate certification document to distinguish the trade of their self-operated commodity from that of agency commodity. The calculation formula is: The amount of Business Tax payable = the amount of expenditures for the current period÷(1-10%-5%) × 5%3. What is the scope of expenditure of resident representative office of foreign enterprise?All expenses paid by a resident representative office of foreign enterprise that are related to its own business should be regarded as its expenditures (either paid within or outside of the Chinese territory). Such expenses include staff wages and salaries, bonus, allowance, welfare payments, material procurement expenses (including fixed assets such as vehicles and office equipment), communication expenses, travelling expenses, rental expenses, equipment lease expenses, transportation expenses, hospitality expenses and other expenses paid both within and outside the Chinese territory.4. How should the rate of commission be determined when a resident representative office of foreign enterprise pay Business Tax based on deemed income?(1) The deemed rate of commission has been reduced from 5% to 3% since 1 October, 1986; and (2) For a resident representative office engaged in advertising intermediary services, its income shall be assessed at 15% of the transaction value indicated in its contracts and agreements. ----------------------------------------------
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发表于 2004-6-15 11:43:00
楼主