Comparison on New & Old Regulations of Stamp Duty in China-Company Formation_Trademark Registration_Tax Service - Hong Kong CPA

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Comparison on New & Old Regulations of Stamp Duty in China

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Comparison on New & Old Regulations of Stamp Duty in China

《Stamp Duty Law of the People’s Republic of China》was verified and approved through The Standing Committee of the National People's Congress on June 10th, 2021, and it will be officially implemented on July 1st, 2022. Comparing with the 《Interim Regulations of the People's Republic of China on Stamp Duty》 promulgated by the State Council in 1988, the new Stamp Duty Law has the following changes:

Eliminating the mantissa rule

The original "Interim Regulations on Stamp Duty" stipulates that if the tax payable is more than one dime, the tail number is less than five points, and the full five points are calculated and paid according to one dime.

The new Stamp Duty Law abolishes this requirement, which means that from 1 July 2022, taxpayers do not need to round up stamp duty when calculating stamp duty and should pay stamp duty according to the actual calculated amount.
It is clarified that VAT is not used as the basis for stamp duty calculation

The new Stamp Duty Law stipulates that the taxable basis for taxable contracts is the amount listed in the contract, excluding the VAT tax specified. The tax basis for the taxation of the taxable property rights transfer document is the amount listed in the property rights transfer document, excluding the VAT tax specified.

If the taxpayer enters a contract with a tax-inclusive price and does not specify VAT separately, stamp duty is payable in full.
Provisions on withholding agents by foreign units or individuals

The original Interim Regulations on Stamp Duty did not stipulate how overseas individuals could pay stamp duty and whether they could be withheld at source. The new Stamp Duty Law stipulates that if a taxpayer is a foreign unit or individual and has an agent in China, he or she shall be the withholding agent in China; if there is no agent in China, the taxpayer shall declare and pay stamp duty on his own, and the specific measures shall be prescribed by the competent taxation department under the State Council.

Clarify the tax payment period and tax payment location

The original Interim Regulations on Stamp Duty did not clearly stipulate the tax payment period and place of payment, and the new Stamp Duty Law stipulates the time and place of payment as follows:

(1)

Levy method

① Quarterly and annual taxation: Taxpayers shall declare and pay taxes within 15 days from the date of quarterly or year-end.
② Individual taxpayer: declare and pay stamp duty to the competent tax authority of the place where the taxable certificate is written, or the taxpayer resides.
③ Stamp duty on securities transactions is released on a weekly basis: The stamp duty withholding agent for securities transactions shall declare the release of taxes and the interest settled by the bank within five days from the date of the end of each week.

(2)

Location of tax payment

① Enterprise taxpayer: declare and pay stamp duty to the competent tax authority where the institution is located.
② Individual taxpayer: Declare and pay stamp duty to the competent tax authority of the place where the taxable certificate is written, or the taxpayer resides.
③ Transfer of property rights in immovable property: declaration and payment of stamp duty to the competent tax authority where the immovable property is located.

Tax headings, tax basis and tax rate changes

NO.	Provisional Regulation on Stamp Duty（Old）		Stamp Duty Law（New）
NO.	Tax items	Tax basis and tax rate	Tax items	Tax basis and tax rate
1	Processing contracts	Charge 5/10,000 of the fee	Contracting	3/10,000 of the remuneration
2	Construction engineering survey and design contract	Charge 5/10,000 of the fee	Construction engineering contracts	3/10,000 of the price of products
3	Transportation contracts	5/10,000 of transportation fee	Transportation contracts	3/10,000 of Transportation fee
4	-	-	Financial lease contracts	0.5/10,000 of rental
5	Transferring equity document	5/10,000 of total amount on equity	Transfer of exclusive rights to trademarks, copyrights, patents and proprietary technology.	3/10,000 of the price of products
6	Business books	5/10,000 of paid-in capital and capital reserve amount	Business books	2.5/10,000 of paid-up capital and capital reserve amount
7	Rights, licenses	5 Yuan per piece	-	-
8			Securities Trading	One thousandth of the transaction amount

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Comparison on New & Old Regulations of Stamp Duty in China

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