Civil Engineering Reference
In-Depth Information
Fig. 4
The comparison of consolidated tax rates for the years (
a
) 2008, (
b
) 2009, (
c
) 2010, and
(
d
) 2011
3
Conclusion
When we look at the VAT system in China, taxpayers have been divided into small-
scale taxpayers and general taxpayers; the statutory VAT tax rate of the general
taxpayer is 13 % or 17 % in different circumstances and the rate of small-scale
taxpayer is 6 %; on exteriorly it seems small-scale taxpayer has a lower VAT tax
rate.
Considering the income tax law in China, the nominal tax rate is 25 %, and there
is a preferential tax rate of 20 % levied to the taxpayer that their annual income is
below 300,000 RMB yuan.
Actually there are enabling preferential tax treatments given to the large state-
owned enterprise. Considering the private enterprise has less tax deductions and
low economic efficiency, it seems that the small- and medium-scale enterprise tax
burden is still relatively high in China.
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