Taxation FAQ's

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How much is the tax rate of permanent establishments of foreign enterprises. And if there is a connection to industry, which jurisdiction will exist in this case?

Permanent establishments of foreign enterprises will be taxed as other foreign invested enterprises ("FIEs") in China at the rate of 33% where the national rate is 30% and the local tax rate is 3%.

If a permanent establishment is also engaged in industries where relevant tax holidays are normally available, the tax treatment of such an establishment of a foreign enterprise is not very clear.

In practice, the tax incentives are hard to obtain because these tax benefits need prior approvals from relevant government authorities, including SAT.