Main type of taxes of a WFOE in China

WFOE refers to wholly foreign owned enterprise. There are mainly two types of taxes for such company:

1. Corporate income tax: It is for the company's profit part. Generally it is 25%. And the tax bureau has preferential policy for Small and micro enterprise. When the annual profit is lower than RMB 3 million, the Corporate income tax is 5%. And this policy will extend to year 2027. After 2027 the tax bureau will announce if it is extended or will be adjusted.

2. VAT tax: It is for the sales and services.?For Gerenal tax payer the VAT tax is 13%. For Small scale tax payer the VAT tax is generally 3 but currently there is good policy and the VAT tax is only 1%.