The payment method is government by a number of tax rules. Generally speaking, full time chief representative without any other job titles shall pay individual income tax for all his/her global income. Part-time chief representative should pay individual income tax for his/her China-sourced income during his/her actual working period in China.
No. Rep offices shall calculate income tax based on actual expenses. Interest revenue shall not offset the expenses of the current period.
No. Penalties and overdue fines paid by Representative offices can be excluded in the expenses when calculating income tax under expense gross-up method.
If your representative office does not fall into the category of tax exemption, following taxes are applied. a)Corporate income tax b)Business tax c)Individual income tax d)Stamp duty e)Any other taxes related to foreign companies
Your representative office should determine the method in accordance with the business nature of your headquarters and practical situation.
Representative offices established by foreign governments, international organizations, not-for-profit organizations, or non-government organizations, etc., can apply for tax free method by submit application to state tax authority. Yet the application process maybe cumbersome and sufficient documents should be filed properly. Under this method, there shall be not business tax and income tax for the representative […]
If a representative office can not be classified as either Actual profit method or Expense Gross-up Method and it is not qualified as a tax free office, it should do its tax filing using this method. Under this method, if the office has revenue, it should pay taxes. If not, it only needs to provide […]
Representative offices are taxed based on the expenses incurred instead of the income received. The tax risk for this form is relatively low. Most of the representative offices of foreign enterprises are taxed on an expense gross-up basis.
This kind of representative office should clearly record its revenue and expenses. Tax filing should be done as if it is a business enterprise. If a representative office can meet certain requirements, for example, a law firm or an accounting firm, it may be taxed on the income actually received.
There are four tax payments methods, i.e., actual profit method, expense gross-up method, actual income method, and tax free method.