All enterprises and other income receiving organizations (excluding sole proprietorship enterprises and partner ship enterprise) within China shall be the taxpayers of the enterprise income tax.
The enterprises are classified into resident enterprises and non-resident enterprises. Resident enterprises shall pay the enterprise income tax for their income sourced within and outside of China.Non-resident enterprises shall pay the enterprise income tax as determined on the basis of whether they have organizations or establishments within China,and whether the income is in fact related to such organizations or establishments.
In terms of the enterprise income tax, the balance derived from the total income in each tax year after deducting the tax-free income, tax-exempt income, other deductible items as well as the permitted carry-forward loss of previous year(s) shall be the taxable income. The tax rate is 25%.
Enterprise income tax shall be calculated on the basis of a tax year which shall commence on January 1 and end on December 31 of each calendar year. Provisional enterprise income tax shall be paid in advance on a monthly or quarterly basis,finally settled at the end of the year, refunded for any over payment or supplemented for any deficiency.
In other words, an enterprise shall, within 15 days after the end of each month or quarter, submit provisional enterprise income tax returns and make provisional tax payments to the tax authority. The enterprise shall submit an annual enterprise income tax return to the tax authority and settle the amount of tax payable or refundable within 5 months after the end of each year.