Income Tax Law

Income Tax Law of the People’s Republic of China Concerning Joint Ventures Using Chinese and Foreign Investment Adopted at the Third Session of the Fifth National People’s Congress and promulgated on 10 September 1980 Article l   Income tax shall be levied in accordance with this Law on the income derived from production, business and other sources by any joint venture with Chinese and foreign investment (hereinafter called “joint ventures”) in the People’s Republic of China.

Income tax on the income derived from production, business and other sources by branches within or outside the territory of China of such joint ventures shall be paid by their head office.

The taxable income of a joint venture shall be the net income in a tax year after deduction of costs, expenses and losses in that year.

The rate of income tax on joint ventures shall be 30 per cent. In addition, a local surtax of 10per cent of the assessed income tax shall be levied.

The income tax rates on joint ventures exploiting petroleum, natural gas and other resources shall be stipulated separately.

In the case of a foreign participant in a joint venture remitting its share of profit from China, an income tax of 10 per cent shall be levied on the remitted amount.