Within the territory of the People’s Republic of China, resident enterprises and non – resident enterprises are taxpayers of corporate income tax and pay enterprise income tax in accordance with the provisions of this Law. The sole proprietorship or partnership shall not apply to this Law.

Resident enterprise: refers to the enterprises in the territory of China, which are legally established in the middle of the territory or in accordance with the laws of the foreign country (region) but are actually simplified. A resident enterprise shall pay enterprise income tax on its income derived from sources within and outside China.

Non-resident enterprises: refers to the establishment in accordance with foreign (regional) law and the actual management institution is not in China, but in China set up institutions, places, or in China has not established institutions, places, but from China. Where a non-resident enterprise establishes an institution or place within the territory of China, it shall pay enterprise income tax in respect of its income derived from its territory, its income from China, and its actual connection with its institutions and establishments located outside China. Where a non-resident enterprise has not established any institution or place in China, or has established an institution or place but has no actual connection with its establishment or place, it shall pay enterprise income tax on its income derived from the territory of the People’s Republic of China.

The enterprise income tax rate is 25%.

Where a non-resident enterprise has not established any institution or place in China, or has established an institution or place but has no actual connection with its establishment or place, it shall pay enterprise income tax on its income derived from the territory of the People’s Republic of China. The income tax rate is 20%.

Mainland China tax items, complex taxes, tax burden is not low. The financial personnel of the enterprise shall, through the adjustment and arrangement of taxpayers’ production and business activities within the scope permitted by law or within the scope not prohibited by law, to minimize the tax burden. This is tax planning.

The basic paths of corporate tax planning are:

• Using tax incentives
• Using of tax law system design
• Avoiding unfavorable tax burdens
• Using tax law “loophole”