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Corporate Income Tax (CIT)

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What is Corporate Income Tax?

Corporate Income Tax (CIT) is a tax levied on the profits of businesses operating in China. The standard CIT rate is 25%(PwC), but preferential rates apply to small businesses, high-tech enterprises, and companies in special economic zones.

Relevance in China

All companies registered in China, including Wholly Foreign-Owned Enterprises (WFOEs) and Joint Ventures (JVs), must pay CIT on their taxable income. China’s tax laws require companies to make advance CIT payments quarterly and submit an annual CIT reconciliation.

How to File and Pay CIT in China

  1. Calculate taxable income (revenue minus allowable expenses).
  2. Submit quarterly CIT prepayments to the local tax bureau.
  3. Conduct an annual CIT reconciliation by May 31 of the following year.
  4. If overpaid, apply for a refund or carry forward the balance.
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