Tax Exemption for RO

Representative offices (ROs) in China are liable for three kinds of tax filing obligations: Business Tax, Enterprise Income Tax for the RO and Individual Income Tax.

Tax Obligations                   Tax Filing                    Tax Payment
Enterprise income tax        Quarterly basis          With in 10days after the end of each quarter
Business tax                        Quarterly basis          With in 10days after the end of each quarter
Individual Income tax          Monthly basis            With in 10days after the end of each month

RO in China are not allowed to engage in direct business operations or direct income-generating activities. However, the tax authorities may levy taxes on China-sourced income arising from certain activities undertaken by ROs.

Taxable Activities

Tax Exempt Activities

Tax liabilities based on actual revenue and profit

Tax liabilities based on total expenses (9.8%)

·Market study

·Provision of Commercial Information

·Liaison and other preparatory and supplementary services of manufacture and sale of its head office’s own products

·Functions performed by the ROs set up by foreign governments or non-profit-making institutions

RO with a head quarter engaged in

·Tax advisory

·Consulting services of law, accounting, auditing and

·Consulting services of banking and financial institutions

·Related services which are required to maintain complete accounting records and evidence of properly calculated revenue and taxable income

RO on behalf of parent company engaged in

·Agency trading activities

·Various service activities of consulting

·Advertisement contracting or agency business of advertising activities

·Service activities for tourists

·Services at various linkages of transportation operations activities

RO Tax Exemption may be able to claim if you can prove that your headquarter company can meet the requirement of Tax exempt activities—RO conducts market research, provides commercial information and liaison to your headquarter for your production, or is a Non-Profit firm, Government or Non-Government organization. Usually (regional variations on this) you will still have to submit a monthly tax filing - it's completed as a `zero' in the amount due column.
A RO after Tax Exemption, it still need to be conducted annually audit report (calendar fiscal year), and be submitted by the end of March the next year—it makes sense therefore to have either a qualified accountant do your ongoing accounting or in common practice, hire an external firm to do the job (outsourcing).

Contact Our Consultant in Shanghai for more details:

Office: 13C,1399,Beijing Road,Shanghai,200040 China

Hotline: 400-820-2586 (English,Mandarin)

Phone: (8621)6279-1870 (English,Mandarin)

Fax: (021)6279-1180

Email : consultant.en@handao.net

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