# Chinese Tax Law — Sub-Lexicon

Use alongside `references/taxes.md` (main tax lexicon) and `sub-lexicons/chinese-corporate-ma-jv.md` for the corporate/M&A interface.

This sub-lexicon covers the tax system of the People's Republic of China (Mainland). Hong Kong SAR, Macao SAR and Taiwan have separate tax systems not covered here.

## 1. Headline Taxes — Terminology and Codes

| Chinese term | English |
|---|---|
| 企业所得税 (企所税) | Enterprise Income Tax (EIT / CIT) |
| 中华人民共和国企业所得税法 | Enterprise Income Tax Law of the PRC (EIT Law, 2007; effective 1 Jan 2008; amended 2017, 2018) |
| 企业所得税法实施条例 | Implementation Regulations on the EIT Law |
| 个人所得税 (个税) | Individual Income Tax (IIT) |
| 中华人民共和国个人所得税法 | Individual Income Tax Law of the PRC (current version effective 1 Jan 2019) |
| 增值税 (增值税) | Value-Added Tax (VAT) |
| 中华人民共和国增值税暂行条例 | Provisional Regulations on VAT (1993; amended) |
| 增值税法 (草案/已通过) | VAT Law (PRC VAT Law, promulgated 25 December 2024, effective 1 January 2026) |
| 消费税 | Consumption Tax (CT; excise-type) |
| 关税 | Customs duty |
| 契税 | Deed Tax |
| 印花税 | Stamp Duty / Stamp Tax |
| 房产税 | Real Estate Tax |
| 城镇土地使用税 | Urban Land Use Tax |
| 城市维护建设税 | Urban Maintenance and Construction Tax (UMCT; surtax) |
| 教育费附加 | Education Surcharge |
| 地方教育附加 | Local Education Surcharge |
| 车船税 | Vehicle and Vessel Tax |
| 车辆购置税 | Vehicle Acquisition Tax |
| 烟叶税 | Tobacco Leaf Tax |
| 船舶吨税 | Vessel Tonnage Tax |
| 环境保护税 | Environmental Protection Tax |
| 耕地占用税 | Farmland Occupation Tax |
| 中华人民共和国税收征收管理法 (征管法) | Law on the Administration of Tax Collection (Tax Collection Administration Law) |
| 国家税务总局 (税务总局) | State Taxation Administration (STA; formerly SAT — State Administration of Taxation) |
| 财政部 | Ministry of Finance (MoF) |
| 海关总署 | General Administration of Customs |

Translator's note: China has progressively elevated each major tax from provisional regulations to formal statute. **EIT** (25% standard, 15% for High and New-Tech Enterprises "HNTE", 20% reduced for small and low-profit enterprises effectively reduced to 5% in 2023–2027) and **IIT** (progressive wage 3%–45%; business-income 5%–35%; flat 20% for investment income) are now by statute. **VAT** is transitioning: the **PRC VAT Law** was enacted on 25 December 2024 and takes effect 1 January 2026 — until then, the Provisional Regulations + the 2016 BT-to-VAT reform apply. Always flag the date and legal source.

**SAT vs STA**: the State Administration of Taxation (SAT) was renamed **State Taxation Administration (STA)** in March 2018. Use STA for post-2018 references; SAT for earlier (but many English documents still use SAT interchangeably — clarify on first mention).

## 2. Direct Taxes — Base, Rates, Allocation

| Chinese term | English |
|---|---|
| 应纳税所得额 | taxable income |
| 应纳所得税额 | EIT payable |
| 收入总额 | gross income |
| 不征税收入 | non-taxable income |
| 免税收入 | tax-exempt income |
| 扣除项目 | deductible items |
| 税前扣除 | pre-tax deduction |
| 成本、费用、税金、损失 | costs, expenses, taxes, losses |
| 合理的支出 | reasonable expenditure |
| 营业外收入/支出 | non-operating income/expense |
| 固定资产折旧 | depreciation of fixed assets |
| 无形资产摊销 | amortisation of intangible assets |
| 亏损弥补 | loss carry-forward (5 years standard; 10 years for HNTE/TSME; 8 years for losses incurred 2020–2022 in difficulty industries) |
| 法定税率 25% | statutory rate 25% |
| 高新技术企业 (高企) | High and New-Tech Enterprise (HNTE; 15% EIT) |
| 技术先进型服务企业 (TASE) | technology-advanced service enterprise (15% EIT in pilot cities) |
| 小型微利企业 | small low-profit enterprise (5% effective during 2023–2027, on part of taxable income up to RMB 3m) |
| 鼓励类西部大开发企业 | encouraged Western Development enterprise (15% EIT) |
| 集成电路企业 / 软件企业 | integrated circuit / software enterprise (tax holidays) |
| 居民企业 | resident enterprise |
| 非居民企业 | non-resident enterprise |
| 实际管理机构 | place of effective management (POEM) |
| 一般反避税管理办法 | General Anti-Avoidance Rules (GAAR; STA Order No. 32 of 2014) |
| 特别纳税调整 | special tax adjustments (covering TP, CFC, thin-cap, GAAR) |

Translator's note: Chinese tax terminology is highly standardised but China-specific. **HNTE status** (高新技术企业) is a formal qualification granted by three-ministry joint review, renewable every 3 years — translate as "High and New-Tech Enterprise" (preserve "HNTE"). The **小型微利企业** (small low-profit enterprise) regime is currently (2023–2027) a cornerstone SME incentive, with effective 5% tax on the portion of taxable income up to RMB 3 million under extension circulars — always verify the latest MoF/STA circular for the year.

## 3. VAT (增值税)

| Chinese term | English |
|---|---|
| 增值税 | value-added tax (VAT) |
| 增值税一般纳税人 | general VAT taxpayer |
| 增值税小规模纳税人 | small-scale VAT taxpayer |
| 应税销售额 | taxable sales amount |
| 销项税额 | output VAT |
| 进项税额 | input VAT |
| 进项税额抵扣 | input VAT credit |
| 不得抵扣的进项税 | non-deductible input VAT |
| 税率 13% (标准税率) | standard rate (13%; reduced from 16% in 2019; from 17% in 2018) |
| 税率 9% | 9% rate (transportation, construction, agricultural products, real property sale) |
| 税率 6% | 6% rate (modern services, financial services, life services) |
| 征收率 3% (小规模) | 3% collection rate (small-scale taxpayers; reduced to 1% under relief policies in various years) |
| 零税率 | zero rate (exports, international transport) |
| 免税 | VAT exemption |
| 出口退税 | export VAT refund (regarded as zero-rating) |
| 免抵退税 | exemption, offset and refund method |
| 营改增 | BT-to-VAT reform (完成于 2016 May 1) |
| 营业税 (已废止) | Business Tax (BT; abolished 1 May 2016) |
| 增值税专用发票 | special VAT invoice (fapiao; used for input VAT credit) |
| 增值税普通发票 | ordinary VAT invoice |
| 电子专用发票 | e-fapiao (electronic special VAT invoice, rolled out nationwide from 2024) |
| 发票 | fapiao (invoice; official tax-controlled invoice) |
| 虚开发票 | false issuance of invoices |
| 金税系统 / 金税四期 | Golden Tax System / Phase IV (tax-IT infrastructure; digital e-invoicing and big-data TP/risk analysis) |

Translator's note: Chinese **fapiao** (official tax-controlled invoice) has no good one-to-one equivalent — translate as "fapiao" (preserve) and gloss as "official VAT invoice" on first mention. The **Golden Tax System** is the centralised tax-IT backbone; **Phase IV** (金税四期) rolled out from 2021 with extended e-invoicing and risk-analysis capability. **The 2024 VAT Law** will consolidate the current provisional regulations from 1 January 2026 — translate carefully for post-2026 documents.

## 4. Withholding Taxes and Cross-Border Items

| Chinese term | English |
|---|---|
| 预提所得税 / 源泉扣缴 | withholding tax at source |
| 非居民企业所得税 | EIT on non-resident enterprises |
| 股息、红利预提税 (10%) | dividend WHT (10% statutory; reduced by treaty) |
| 利息预提税 (10%) | interest WHT (10% statutory; reduced by treaty) |
| 特许权使用费预提税 (10%) | royalty WHT (10% statutory; reduced by treaty) |
| 财产转让所得预提税 (10%) | capital gain WHT (10% on gains attributable to PRC assets) |
| 间接转让中国居民企业股权 (Bulletin 7 / 公告 2015 年 第 7 号) | indirect transfer of equity in PRC resident enterprise (Bulletin 7, successor to Circular 698) |
| 受益所有人 | beneficial owner |
| 税收协定待遇 | tax treaty benefits |
| 税收居民身份证明 | certificate of tax residency |
| 税收协定 | tax treaty |
| 内地与香港避免双重征税安排 | Mainland-HK double tax arrangement (DTA) |
| 多边公约 (MLI) | Multilateral Instrument |
| 主要目的测试 (PPT) | principal purpose test |
| 扣缴义务人 | withholding agent |
| 非居民享受税收协定待遇管理办法 | Administrative Measures on Non-Residents Claiming Treaty Benefits (STA Bulletin 2019-35) |

Translator's note: **Bulletin 7** (国家税务总局公告 2015 年第 7 号 — STA Public Notice No. 7 of 2015) governs the taxation of indirect transfers of PRC taxable assets (equity in PRC-resident enterprises, PRC real estate, PRC-establishment assets) through offshore share deals — translate as "Bulletin 7" and explain the anti-avoidance GAAR mechanism. It replaced the earlier Circular 698 (Guoshuihan [2009] 698). **Beneficial owner** analysis for treaty WHT relief is governed by **STA Bulletin 2018-9** (which sets safe-harbour and factor tests).

## 5. Residency, PE, Allocation

| Chinese term | English |
|---|---|
| 依照中国法律、行政法规在中国境内成立 | established in China under Chinese law/regulations |
| 实际管理机构在中国境内 | place of effective management in China (also basis for residency) |
| 机构、场所 | establishment / place (domestic PE analogue) |
| 常设机构 (PE) | permanent establishment |
| 工程型/服务型常设机构 | construction/service PE |
| 代理型常设机构 | agency PE |
| 与机构场所有实际联系的所得 | income effectively connected with the establishment/place |
| 来源于中国境内的所得 | income sourced in China |
| 居民个人 | resident individual (183-day rule + domicile) |
| 非居民个人 | non-resident individual |
| 满 183 天 | 183-day threshold |
| 无住所个人 | individual without domicile |

Translator's note: the IIT **183-day rule** combines with the **"six-year rule"** (连续居住满六年且每年在境内居住天数满 183 天) — a non-domiciled individual who has been PRC tax-resident for six consecutive years, spending ≥183 days each year and without any single ≥30-day absence, becomes taxable on worldwide income from the seventh year. The six-year counter can be reset by a single absence of >30 consecutive days. Translate carefully and flag effective dates of the 2019 rules (before 2019, it was a five-year rule under different mechanics).

## 6. Transfer Pricing and Anti-Avoidance

| Chinese term | English |
|---|---|
| 转让定价 | transfer pricing |
| 关联方 / 关联企业 | related party / related enterprise |
| 独立交易原则 (独立交易原则) | arm's length principle |
| 可比性分析 | comparability analysis |
| 关联申报 | related-party transaction reporting (annual return schedule) |
| 同期资料 | contemporaneous documentation (master file, local file, special-issue file) |
| 主体文档 / 本地文档 / 特殊事项文档 | master file / local file / special-issue file |
| 国别报告 (CbCR) | country-by-country report |
| 预约定价安排 (APA) | advance pricing arrangement |
| 双边预约定价安排 (BAPA) | bilateral APA |
| 相互协商程序 (MAP) | mutual agreement procedure |
| 利润水平指标 (PLI) | profit level indicator |
| 资本弱化 (thin capitalisation) | thin capitalisation |
| 资本弱化管理办法 | Thin-Capitalisation Administrative Measures (标准债资比：金融企业 5:1；其他 2:1) |
| 受控外国企业 (CFC) | controlled foreign corporation (CFC) |
| 一般反避税 (GAAR) | general anti-avoidance rule |
| 一般反避税管理办法 (试行) | General Anti-Avoidance Administrative Measures (Trial) (STA Order No. 32 of 2014) |
| 特别纳税调整实施办法 (试行) | Implementation Measures for Special Tax Adjustments (Trial) — Guoshuifa [2009] No. 2, superseded in part by Bulletins 2016-42, 2017-6, 2017-17 |
| 双层股权架构 | dual-layer equity structure |
| 避税地 | tax haven |
| BEPS 1.0 / 2.0 | BEPS 1.0 / 2.0 |
| 支柱二 / 全球最低税 | Pillar Two / global minimum tax |

Translator's note: China's **thin-capitalisation** debt-to-equity ratios are fixed: 2:1 for non-financial enterprises, 5:1 for financial enterprises — interest on related-party debt above these ratios is non-deductible, subject to arm's-length and tax-rate-arbitrage exemptions. China has **not yet adopted Pillar Two for domestic implementation** as of early 2025 (no QDMTT, IIR or UTPR in force domestically); some commentary suggests China is positioning for a QDMTT. Always verify current status and effective date before translating Pillar Two references.

## 7. Procedure and Compliance

| Chinese term | English |
|---|---|
| 纳税申报 | tax filing (return) |
| 纳税申报表 | tax return |
| 纳税人识别号 / 统一社会信用代码 | tax identification number / unified social credit code |
| 税务登记 | tax registration |
| 汇算清缴 | annual final settlement (EIT annual reconciliation) |
| 预缴 | interim/provisional payment |
| 按月/按季申报 | monthly/quarterly filing |
| 税款滞纳金 | tax late-payment surcharge (0.05%/day statutory, ~18.25% p.a.) |
| 税务检查 | tax inspection |
| 税务审计 | tax audit |
| 纳税评估 | tax assessment/review |
| 风险管理 / 大企业税收风险 | tax risk management / Large Enterprise risk |
| 金税系统 (Phase IV) | Golden Tax System (Phase IV) — AI-driven risk identification |
| 税收保全 | tax preservation measures |
| 强制执行 | enforced collection |
| 纳税担保 | tax guarantee (for disputed tax) |
| 电子税务局 | e-Tax Bureau (online filing portal) |
| 税务注销 / 税务清算 | tax deregistration / tax liquidation |
| 个人所得税综合所得汇算清缴 | IIT comprehensive-income annual reconciliation |

Translator's note: the **汇算清缴** (annual final settlement) is the EIT filing + reconciliation completed by 31 May following the tax year — translate as "annual final settlement" or "EIT annual reconciliation". The parallel **IIT comprehensive-income annual reconciliation** is a post-2019 innovation for residents with wage/labour-service/royalty income.

## 8. Authorities, Litigation, Criminal

| Chinese term | English |
|---|---|
| 省/市/区/县税务局 | provincial/municipal/district/county tax bureau |
| 税务稽查局 | tax inspection bureau |
| 大企业税收管理司 | Large Enterprise Tax Department |
| 国际税务司 | International Tax Department |
| 行政复议 | administrative reconsideration (first-level administrative remedy) |
| 税务行政复议 | tax administrative reconsideration |
| 行政诉讼 | administrative litigation |
| 人民法院 | People's Court |
| 最高人民法院 | Supreme People's Court |
| 最高人民检察院 | Supreme People's Procuratorate |
| 纳税前置 | tax-payment precondition (for administrative reconsideration, except certain acts) |
| 纳税担保前置 | tax-guarantee precondition |
| 逃税罪 (刑法第 201 条) | crime of tax evasion (Criminal Law Art. 201) |
| 抗税罪 | crime of tax resistance |
| 骗取出口退税罪 | crime of fraudulently obtaining export VAT refund |
| 虚开增值税专用发票罪 (刑法第 205 条) | crime of falsely issuing special VAT invoices (Criminal Law Art. 205) |
| 非法出售增值税专用发票罪 | crime of illegally selling special VAT invoices |

Translator's note: China has a **"pay-first" rule (纳税前置)** — taxpayers wishing to challenge a substantive tax determination must first pay (or post guarantee for) the tax in dispute before filing administrative reconsideration. Administrative litigation requires prior reconsideration for substantive tax disputes. The 2024 revisions of the **Tax Collection Administration Law** (under discussion) may modify this pre-payment rule — check current law.

## 9. M&A and Restructuring Interface

| Chinese term | English |
|---|---|
| 企业重组 | enterprise reorganisation |
| 特殊性税务处理 | special tax treatment (tax-deferred, under conditions) |
| 一般性税务处理 | general tax treatment (taxable) |
| 财税 [2009] 59 号 / 公告 2015 年第 48 号 | Caishui [2009] No. 59 / STA Bulletin 2015-48 (reorganisation tax rules) |
| 股权收购 | equity acquisition (stock purchase) |
| 资产收购 | asset acquisition |
| 合并 (吸收合并 / 新设合并) | merger (absorption / new-establishment) |
| 分立 (存续分立 / 新设分立) | division (survival / new-establishment) |
| 债务重组 | debt restructuring |
| 企业法律形式改变 | change of legal form |
| 跨境重组 | cross-border reorganisation |
| 跨境股权转让 (直接转让) | cross-border direct equity transfer |
| 间接转让中国应税财产 (Bulletin 7) | indirect transfer of PRC taxable assets (Bulletin 7) |
| 合理商业目的 | reasonable commercial purpose |
| 主要目的或主要目的之一 | main or one of the main purposes (GAAR trigger) |
| 12 个月内实际持股 | actual holding for 12 months (anti-abuse) |
| 股权比例 (50% 或 75%) | equity-proportion threshold (50% for parent-subsidiary in certain reliefs; 75% for special tax treatment under Circular 59) |
| 对价 (股权支付 ≥ 85%) | consideration (equity consideration ≥ 85% for special tax treatment) |
| 不转让所取得股权 (12 个月) | no-transfer-of-acquired-equity undertaking (12 months) |
| 经营连续性 | continuity of business |
| 土地增值税 | Land Appreciation Tax (LAT; real-estate super-gains tax, 30–60% progressive) |
| 契税 (3%–5%) | Deed Tax (3%–5%, on real-estate transfers, including certain share deals) |
| 产权转移书据印花税 | stamp duty on transfer of property rights documents |
| 股权转让印花税 (0.05%) | stamp duty on equity transfer (0.05%) |
| 免征契税 / 印花税 (特殊重组) | deed tax / stamp duty exemption (on qualifying reorganisations) |
| 股权激励 | equity incentive plans |

Translator's note: the **Caishui [2009] No. 59** "special tax treatment" (特殊性税务处理, STT) regime is the Chinese tax-neutral reorganisation framework. Five cumulative conditions must be satisfied: reasonable commercial purpose, qualifying form, equity-proportion threshold (typically 50%/75%), equity-consideration threshold (≥85%), and 12-month no-transfer undertaking — translate precisely. **Bulletin 7** (2015) governs indirect-transfer anti-abuse (above §4). **Land Appreciation Tax** is a distinctive Chinese tax on real-estate super-gains (30/40/50/60% progressive on value added) — translate as "Land Appreciation Tax" (preserve).

## 10. Personal, Inheritance and Wealth Interface

| Chinese term | English |
|---|---|
| 综合所得 | comprehensive income (wages, labour service, royalties, writing) |
| 经营所得 | business income (5%–35% progressive) |
| 利息、股息、红利所得 | interest, dividend and bonus income (flat 20%) |
| 财产租赁所得 / 财产转让所得 | property lease / property transfer income (flat 20%) |
| 偶然所得 | incidental income (flat 20%) |
| 专项附加扣除 | special additional deductions (子女教育、继续教育、大病医疗、住房贷款利息、住房租金、赡养老人、3 岁以下婴幼儿照护) |
| 3 岁以下婴幼儿照护 | child-care for infants under 3 (deduction) |
| 年度综合所得汇算清缴 | annual IIT comprehensive-income reconciliation |
| 专项扣除 (社保和公积金) | special deductions (social insurance + housing fund) |
| 免征额 (标准扣除 RMB 60,000/年) | standard deduction (RMB 60,000/year for residents) |
| 外籍个人津贴免税 / 综合扣除 | expat-allowance exemption / comprehensive deduction (choice available until end-2027 per extension) |
| 税收居民个人 (worldwide) | resident individual (worldwide taxation) |
| 非居民个人 (源泉地) | non-resident individual (source-only taxation) |
| 183 天规则 | 183-day rule |
| 六年规则 | six-year rule (reset by ≥30 consecutive days absence) |
| 遗产税 | inheritance/estate tax (not imposed in PRC as of 2025) |
| 赠与税 | gift tax (not imposed in PRC as of 2025) |

Translator's note: **China does not impose inheritance tax, gift tax or net-wealth tax** — translate carefully to avoid misleading the reader. Periodic discussions about a real-estate tax pilot (Shanghai and Chongqing since 2011; broader pilot announced but paused in 2022/2023) and inheritance tax speculation — verify current status.

## 11. Tax Incentives, Innovation, Real-Estate Facilities

| Chinese term | English |
|---|---|
| 研发费用加计扣除 | R&D super-deduction (100% additional deduction — i.e. 200% total — since 2023 for most industries) |
| 加计扣除 100% | 100% super-deduction |
| 高新技术企业 (15% EIT) | High and New-Tech Enterprise (15%) |
| 小型微利企业 (5% 实际税率) | small low-profit enterprise |
| 技术先进型服务企业 | technology-advanced service enterprise |
| 西部大开发企业 (15%) | Western Development enterprise |
| 海南自由贸易港 (15%) | Hainan Free Trade Port enterprise (15% on rewarded industries; 0% on new overseas direct investment gains pilot) |
| 前海、横琴、平潭等特殊区域 | Qianhai, Hengqin, Pingtan and other special zones |
| 综合保税区 | comprehensive bonded zone |
| 集成电路与软件企业税收优惠 | integrated circuit and software enterprise incentives (tax holidays, reduced rates) |
| 创业投资 / 天使投资人 | venture capital / angel investor (deduction against taxable income for qualifying investments) |
| 股权激励递延纳税 | deferred IIT on equity incentives (non-listed companies under Caishui [2016] No. 101) |

## 12. Customs and Excise

| Chinese term | English |
|---|---|
| 进口增值税 | import VAT |
| 进口消费税 | import consumption tax |
| 消费税 (高档消费品) | Consumption Tax (on tobacco, alcohol, luxury, vehicles, fuel, etc.) |
| 资源税 | Resource Tax (on mined minerals) |
| 耕地占用税法 | Farmland Occupation Tax Law |
| 关税法 | Customs Duty Law (effective 1 December 2024) |

Translator's note: The **Customs Duty Law (关税法)** was enacted 26 April 2024 and takes effect 1 December 2024 — it replaces the prior Customs Import and Export Tariff Regulations. Similarly, the **VAT Law** takes effect 1 January 2026. Progressive codification continues.

## 13. Verbal Anchors — Tax Context

| Chinese | English |
|---|---|
| 征收 | to levy / to collect |
| 缴纳 | to pay / remit |
| 申报 | to declare / file |
| 扣缴 | to withhold |
| 补缴 | to pay additional tax (shortfall) |
| 退(还)税 | to refund tax |
| 抵扣 | to credit / offset |
| 享受…税收优惠 | to enjoy tax incentive |
| 不征税 | not subject to tax |
| 适用…税率 | apply [rate] |
| 视同销售 | deemed sale (for VAT/EIT) |
| 视同股息分配 | deemed dividend |
| 从应纳税所得额中扣除 | to deduct from taxable income |
| 计入应纳税所得额 | to include in taxable income |
| 实质重于形式 | substance over form |

## 14. Section Headings — Common Tax-Document Rubrics

| Chinese | English |
|---|---|
| 纳税义务人与征税范围 | Taxpayers and scope |
| 税率 | Tax rate(s) |
| 应纳税所得额的计算 | Computation of taxable income |
| 资产的税务处理 | Tax treatment of assets |
| 税收优惠 | Tax incentives |
| 源泉扣缴 | Withholding at source |
| 征收管理 | Collection and administration |
| 申报与缴纳 | Filing and payment |
| 法律责任 | Legal liability |
| 附则 | Supplementary provisions |

## 15. Notes and Cautions

- **Citation style.** Chinese tax instruments form a hierarchy:
  - *Law* (法) — e.g., *EIT Law*, *IIT Law*, *Tax Collection Administration Law*, *VAT Law* (2026);
  - *Regulations / Implementation Regulations* (条例 / 实施条例) — State Council;
  - *Circulars* (通知) issued jointly by MoF and STA, cited as **Caishui [year] No. X** (财税 [年] 第 X 号);
  - *STA Notices / Bulletins* (公告) — e.g., **STA Bulletin 2015-7** (国家税务总局公告 2015 年第 7 号 — Bulletin 7 on indirect transfers);
  - *Guoshuihan / Guoshuifa* (国税函 / 国税发) — older STA letter-format circulars.
  - In English: render "Caishui [2009] No. 59" or "Circular 59", "Bulletin 7", "STA Bulletin 2019-35" — preserving the numbering is essential for practitioners to locate the source.
- **Statutory codification timeline.** Note the rapid progression from "Provisional Regulations" to formal statutes:
  - **EIT Law** (2007, effective 2008; last amended 2018);
  - **IIT Law** (current version effective 2019, major reform introducing comprehensive income, 6-year rule, special additional deductions);
  - **VAT Law** (enacted 25 Dec 2024, effective 1 Jan 2026 — replaces 1993 Provisional Regulations as amended);
  - **Customs Duty Law** (enacted 26 Apr 2024, effective 1 Dec 2024);
  - **Resource Tax Law** (effective Sep 2020);
  - **Tobacco Leaf Tax Law**, **Environmental Protection Tax Law**, **Vehicle and Vessel Tax Law**, **Deed Tax Law**, **Stamp Duty Law** — all enacted 2017–2021.
  - Always flag the applicable law by date.
- **Pillar Two.** China has **not yet implemented** QDMTT, IIR or UTPR domestically (as of April 2026). Public-domain consultations and positioning suggest a QDMTT may be introduced in the near term. Do not assume implementation; flag the status and effective date in translation.
- **SAT → STA rename.** The State Administration of Taxation was renamed State Taxation Administration in March 2018. Translations of post-2018 Chinese tax documents should use STA; pre-2018 uses SAT. Many bilateral treaties and older English materials use SAT.
- **"特殊性税务处理" (Special Tax Treatment, STT).** The Chinese tax-deferred reorganisation regime under Caishui [2009] No. 59 and subsequent bulletins. Requires five cumulative tests. Translate as "special tax treatment" or "STT" — not "special-purpose treatment" or other calques.
- **"间接转让" (Indirect Transfer) — Bulletin 7.** Governs disposals of offshore holding-company shares where the underlying value derives from PRC-situs assets. Aggressive GAAR application. Translate as "indirect transfer" and preserve "Bulletin 7" reference.
- **Resident individual six-year rule.** From 1 January 2019 under current IIT Law: a non-domiciled individual who has been PRC tax-resident for six consecutive years (each year ≥183 days, no single absence ≥30 days) becomes taxable on worldwide income. One absence of >30 days within a year resets the counter. Always flag the year and the reset mechanics.
- **VAT rate changes history.** Standard rate was cut from 17% → 16% (1 May 2018) → 13% (1 April 2019). The 9% bracket (was 11%) covers construction, transport, postal, real-property sale, agricultural products. 6% covers modern services, financial services, life services, telecoms, R&D. Always flag the year for rate references.
- **Local surtaxes.** Urban Maintenance and Construction Tax (7%/5%/1% depending on location) + Education Surcharge (3%) + Local Education Surcharge (2%) are levied **on the amount of VAT/CT paid** — these effectively add up to ~12% of VAT/CT. Translate as distinct items.
- **Hainan Free Trade Port.** 15% EIT on encouraged industries; 0% on qualifying new overseas direct investment gains. Extended and refined through 2035 target. Flag the effective regime and period.
- **Social Credit linkage.** Tax compliance interacts with the Social Credit System — "Major Tax Illegality" classification can lead to joint-disciplinary measures affecting bank, customs, travel, bidding. Translate "重大税收违法失信主体" as "Major Tax Illegality subject".
- **False friends.**
  - *税 (shuì)* → tax; ubiquitous. *税收* = taxation (the system).
  - *关税* → customs duty (not "customs tax").
  - *印花税* → stamp duty (not "flower tax"; 印花 = stamp/chop).
  - *契税* → Deed Tax (not "contract tax" — it applies to real-estate ownership-transfer documents).
  - *土地增值税* → Land Appreciation Tax (not "land VAT" — entirely separate from 增值税/VAT).
  - *所得* → income (in tax context).
  - *预提* → to withhold in advance → WHT at source.
  - *扣缴* → to withhold and remit.
  - *清缴 / 汇算清缴* → final settlement / annual reconciliation (not "clearing").
  - *发票* → fapiao (preserve) / official invoice.
  - *虚开* → false issuance (of invoices — a serious criminal concept).
  - *非居民企业* → non-resident enterprise (tax-resident, not immigration).
  - *地方税* → local tax (not "place tax").
  - *税务机关* → tax authority (not "tax agency" in the sense of a private service firm).
  - *税务师* → tax agent / certified tax agent (CTA; a regulated profession, similar to a tax advisor with licence).
  - *稽查* → inspection (tax-enforcement investigation, distinct from 审计 audit).
- **Script variants.** Mainland uses Simplified Chinese (简体); Hong Kong, Macao and Taiwan use Traditional (繁體 / 繁体). Translate characters as presented; do not convert scripts in legal translation without instruction. Terminology diverges significantly between Mainland and Hong Kong/Taiwan tax systems — cross-check before using a term from one system in the context of another.
