The Urban Maintenance and Construction Tax Law of the People's Republic of China, adopted on August 11, 2020, will become effective on September 1, 2020. The original text of this law has been updated to MYA’s website.
(Chinese: http://www.my-associate.com/news1/shownews.php?id=156
English: http://www.my-associate.com/news2/shownews.php?id=158&lang=en)
What’s new in this Law compared with the Interim Regulations of 2011:
1. Taxpayers | All entities and individuals subject to VAT and consumption tax within the territory of the People's Republic of China (Business tax is no longer one of the conditions nor the tax calculation basis. The country scope is newly added.) |
2. Tax calculation basis | The calculation basis shall deduct the amount of VAT refunded for the end-of-period tax credits pursuant to the provisions. |
3. Scope | The amounts of VAT and consumption tax paid for imported goods or labor services, services or intangible assets sold within the territory of China by overseas entities and individuals are not subject to urban maintenance and construction tax. |
4. Taxpayer’s location (tax rate related) | The taxpayer's domicile or any other place related to the taxpayer's production and business activities, and the specific location shall be determined by the local province, autonomous region or centrally-administered municipality. |
5. Calculation method | Multiply the tax base by the specific applicable tax rate. |
(Resource Promulgation Authorities: Standing Committee of the National People's Congress, Release Date: 2020.08.11, Effective Date: 2021.09.01, Doc Number: Presidential Decree No. 51, Doc Name: Urban Maintenance and Construction Tax Law of the People's Republic of China)