Type of tax Rate

Income tax 20% on rental income
Business tax 5% on rental income
City property tax 18% on rental income

The resident tenant has an obligation to withhold taxes upon the payment of rental to the foreign owner. On the other hand, the foreign owner can appoint a domestic tax agent to act for it. The tax agent will apply for a temporary tax registration on behalf of its principle, and obtain the tax invoices at the tax office upon payment of taxes.

Both the foreign owner and the domestic tenant shall also pay stamp tax respectively at a rate of 0.1% on the rental amount. In addition, the tenancy agreement shall be registered at the local administrative organs. Thirdly, the landlord shall ensure that it has got a lease certificate for the rented property.

TRANSFER OF PROPERTY
Non-resident foreign investor receiving consideration for the transfer of landed property located in the PRC will be subject to the following type of taxes: -

Type of tax Rate

Income tax 20% on consideration
Business tax 5% on consideration
Stamp duty 0.05% on consideration
Land value appreciation tax 30% – 60% depending upon the appreciated value
Land value appreciation tax is levied on 4 different brackets of the appreciated value, which is arrived at by reference to the selling price minus the direct cost and the statutory deductions including business and stamp taxes. The income tax rate will be reduced to 10% if the owner is a resident of a PRC treaty country.

The buyer, on the other hand, has to pay a deed tax at the rate of 3% on total consideration irrespective of whether he is a resident or a non-resident.

Scope
Deed tax is payable by the transferee upon the transfer of landed property. Transfer of landed property takes the following ways: -
Acquisition of land use right from the State;

Transfer of land use right including transfer by sale, by exchange, or gift,

Purchase and sale of real property situated on lands.

Deemed transfer
Contribution of capital to a company in a form of land use right, or real property, settlement of debt by transfer of property title, or obtaining property title by winning in a lottery are deemed to be transfer of landed property.

Rates
Deed tax rate ranges from 3% to 6%, to be adjusted by provincial governments, and the four municipalities directly administered by the Central People’s Government.