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How do individuals whose profit comes from contracting and leasing of operation pay tax?
  • Update:2007-04-19 17:05

Income of individuals whose profit comes from contracting and leasing of operation refers to the income from contracting, leasing, sub-contracting and sub-leasing of operation, including salary income from each month or each time.

Here are the several conditions of such income:

1) Individuals whose income comes from contracting and leasing of operation after submitting a certain amount to the enterprise. Individual income tax shall be levied.

Tax to be levied = Income from contracting and leasing of operation – other necessary costs (RMB 800 Yuan each month)

An amount of tax shall be levied according to the 5% to 35% of five-degree aggregate tax rate (see the following chart).

Formula for tax to be levied:

Tax To Be Levied = Tax to be levied * applicable tax rate – adjustable amount

2) Individuals only get its income according to the agreement and do not have ownership over the contracting and leasing of the contracted and leased operation. Individual tax shall be paid according to the 5% to 45% nine-degree tax rate.

Also, I industrial and commercial registration is changed into individual operation, and then tax shall be levied according to the production and operation income of individual businesses. If no complete and accurate tax materials can be provided, then amount of tax to be levied shall be decided by relevant taxation authorities.