Key practical points:
• Companies are taxed on net profit (revenue minus allowable expenses), not on gross sales.
• There is a standard corporate rate, with reduced rates for qualifying small low-profit firms and high-tech enterprises (check the current rate).
• A resident enterprise is taxed on its worldwide income, while a non-resident is usually taxed only on its China-source income.
• An annual tax return is required, with periodic advance (provisional) payments during the year.
• Keeping proper books and accounts is essential to prove expenses and deduct them from the taxable base.
• Incentives and exemptions exist for certain sectors and zones; consult a local accountant to use them correctly.
💰 Tax
Enterprise Income Tax Law · Yalla China
企业所得税法 / Enterprise Income Tax Law
Enacted: 2007-03-16 ✅ Effective: 2008-01-01
📝 Overview
Companies in China pay tax on their profits. The law sets the standard rate, reduced rates for small low-profit and high-tech firms, and the difference between resident and non-resident enterprises. Important for business owners.
This is general information only, not legal advice. For your specific case, consult a licensed lawyer.
📜 The law text / key provisions
💬 Practical reading
💬 This is a general reading/opinion for orientation — not the official legal text nor legal advice.
The Enterprise Income Tax Law is the foundation of how your company is taxed in China. The core idea is that you pay on net profit, so keeping proper books and documenting expenses lawfully reduces your tax. Your company's classification (small low-profit, high-tech, resident or non-resident) strongly affects the rate applied. Rates and incentives are adjusted from time to time, so it is best to work with a licensed Chinese accountant who keeps your returns and payments on schedule. This is general orientation, not formal legal advice.
📎 Official source
chinatax.gov.cn / npc.gov.cn
🕒 Updated: 16 March 2026