China Tax Rates 2026: Individual Income Tax, Corporate Tax, VAT and Withholding

China Tax Residency for Individuals

An individual who is domiciled in China, or who is not domiciled in China but stays in China for an aggregate of at least 183 days during a tax year, is generally treated as a resident individual for Chinese individual income tax purposes. A non-resident individual is generally taxable on China-source income.

Special rules apply to individuals without a domicile in China. In certain circumstances, foreign-source income paid by an overseas entity or individual may remain exempt where the statutory six-year rule and absence conditions are satisfied.

China Individual Income Tax Rates for 2026

For resident individuals, comprehensive income-principally wages and salaries, remuneration for personal services, author's remuneration and royalties-is aggregated annually. After applicable deductions, annual taxable comprehensive income is subject to progressive rates from 3% to 45%.

The table applies to annual taxable comprehensive income after statutory deductions. Separate rules apply to non-resident individuals and to income categories that are not comprehensive income.

Basic and Special Individual Income Tax Deductions

For resident individuals, the basic deduction for annual comprehensive income is RMB 60,000. The law also permits specified social-insurance and housing-fund deductions, qualifying special additional deductions and other deductions allowed under Chinese tax rules.

Because deduction eligibility and supporting-document requirements depend on the taxpayer's circumstances, the current State Taxation Administration rules should be checked before filing.

Income from Business Operations

Income from business operations is taxed separately from comprehensive income and is subject to progressive individual income tax rates from 5% to 35% on annual taxable business income after allowable costs, expenses and losses.

Interest, Dividends, Property and Capital Gains for Individuals

Under the Individual Income Tax Law, interest, dividends and bonuses, property leasing income, income from transfer of property and incidental income are separate categories rather than comprehensive income. A 20% proportional rate generally applies under the statutory rate rules, subject to exemptions, special measures and treaty provisions where applicable.

Capital-gain treatment can differ by asset type and transaction. Securities, real estate and other property transfers may be subject to specific rules, exemptions or additional taxes, so the transaction-specific provisions should be reviewed.

China Enterprise Income Tax Rates

The standard enterprise income tax rate is 25%. A qualifying high and new technology enterprise specifically supported by the State may be taxed at 15%.

For qualifying small and low-profit enterprises, the current concession allows only 25% of taxable income to be included in the tax base and applies a 20% enterprise income tax rate, producing an effective burden of 5% on qualifying taxable income. This policy is scheduled to run through 31 December 2027. The enterprise must satisfy the applicable income, employee and asset thresholds and other conditions.

Withholding Tax for Non-Resident Enterprises

A non-resident enterprise without an establishment or place in China, or whose relevant China-source income is not effectively connected with such establishment or place, is subject to enterprise income tax on qualifying China-source income. Although the Enterprise Income Tax Law states a 20% rate for this category, the implementing rules reduce the rate to 10% for qualifying income.

This 10% domestic rate commonly affects China-source dividends, interest, royalties and certain gains paid to non-resident enterprises. A tax treaty or other applicable arrangement may reduce or otherwise modify the domestic treatment if its conditions are satisfied.

China VAT Rates from 2026

China's Value-Added Tax Law took effect on 1 January 2026. The principal VAT rates for general taxpayers are:

Small-scale taxpayers generally use the simplified method under the VAT Law. Temporary preferential measures may apply, including a reduced 1% collection rate for certain small-scale taxpayer transactions through 31 December 2027, subject to the detailed statutory conditions.

China Tax Year, Filing and Payment Dates

The individual income tax year follows the calendar year. Where a resident individual is required to complete annual reconciliation for comprehensive income, the filing period is generally 1 March to 30 June of the following year.

Where a withholding agent pays taxable individual income, it is generally responsible for withholding and remitting tax under the Individual Income Tax Law. Tax withheld is generally paid to the State treasury by the 15th day of the following month together with the prescribed withholding return.

Enterprise income tax uses annual taxation with periodic prepayments and annual final settlement under the enterprise income tax rules. Exact deadlines and filing requirements depend on the taxpayer and tax type.

Official China Tax Sources

• State Taxation Administration - Individual Income Tax Law
• State Taxation Administration - Individual Income Tax Law and rate schedules
• State Taxation Administration - Enterprise Income Tax Law
• State Taxation Administration - Small and low-profit enterprise tax policy through 2027
• State Taxation Administration - Value-Added Tax Law effective 2026