China Tax Administration System
In China, the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) are delegated to interpret and implement of the China tax laws and regulations. The enforcement of the tax collection at the local levels is also supervised by the SAT.
The tax administration on the enterprise level, including domestic enterprises, foreign investment enterprises (FIEs) and foreign enterprises (FEs), and individual level, including Chinese and foreign residents, is administered by the local branches of the SAT and the local branches of the Local Tax Bureau, respectively. Generally, China value added tax (VAT) is administered by the local branches of the SAT whereas China business tax (BT), China individual income tax (IIT) and other local taxes are administered by the local branches of the Local Tax Bureau.
Especially, with the introduction of the China corporate income tax (CIT) in 2008, the allocation of administration duties is done as follows: for companies established before 1 January 2009, CIT is handled by the local branches of the SAT; for companies established on or after 1 January 2009, CIT (which are mainly VAT taxpayers) is administered by the local branches of the SAT, while CIT (which are mainly BT taxpayers) is administered by the local branches of the Local Tax Bureau.
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