Method of computation: Monthly tax payable = monthly taxable income * applicable tax rate - allowable deduction

* Income from remuneration for labour service

Income from the remuneration for labour service is taxable on each payment. For remuneration received in each payment of less than Rmb4,000, a deduction of Rmb800 is allowed for expenses and the remaining amount is taxed at 20%. For each payment of Rmb4,000 or more, a deduction of 20% is allowed for expenses and the remaining amount is the taxable income. That part of taxable income not exceeding Rmb20,000 will be taxed at 20%; that part of taxable income exceeding Rmb20,000 but less than Rmb50,000 will be taxed at 30%; while that part of taxable income exceeding Rmb50,000 will be taxed at 40%. In other words, remuneration for labour service is taxed at the three progressive rates of 20%, 30% and 40% Income from author's remuneration

Income from author's remuneration is taxable on each payment. For remuneration received in each payment of less than Rmb4,000, a deduction of Rmb800 is allowed for expenses. For each payment of Rmb4,000 or more, a deduction of 20% is allowed for expenses and the remaining amount is the taxable income. Tax payable is computed at a rate of 20%, with a further deduction of 30%.

Taxable income = income from taxable item - Rmb800 (or income from taxable item * 20%)

Tax payable = taxable income * 20% * (1 - 30%)

* Income from royalties and property leasing

Such income is taxable on each payment. For remuneration received in each payment of less than Rmb4,000, a deduction of Rmb800 is allowed for expenses. For each payment of Rmb4,000 or more, a deduction of 20% is allowed for expenses. The remaining amount will be taxed at 20%.

Taxable income = income from taxable item - Rmb800 (or income from taxable item * 20%) Tax payable = taxable income * 20%

* Income from transfer of property

Income from the transfer of property is taxed at a rate of 20%.

Taxable income = income from transfer of property -original value of property - reasonable expenses

Tax payable = taxable income * 20%

* Income from interest, dividends and bonuses, contingent income and other income
The applicable tax rate is 20%.

Tax payable = income from each payment * 20%

(c) Filing of Tax Returns

Tax returns may be filed by taxpayers themselves or by withholding agents.

7. Land Appreciation Tax

Land appreciation tax is levied on units and individuals on incomes derived from the transfer of state-owned land-use rights, buildings and their attached facilities, and are assessed at a prescribed tax rate on the basis of the appreciation amount derived by the taxpayer from the transfer of real estate.

(a) Taxpayer

Taxpayers of land appreciation tax are units and individuals who transfer state-owned land-use rights, buildings and their attached facilities and derive income from such transactions.

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