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Many cross-border sellers can't tell the difference between small-scale taxpayers and general taxpayers after registering their companies, and they can't figure out how to calculate the value-added tax (VAT) and enterprise income tax (EIT). This article for you to dismantle the main tax calculation method, tax process and the latest tax incentives, to help you comply with tax reporting, reasonable tax savings.

I. Main taxes and calculation methods

1. Value added tax

Small taxpayers:

VAT exemption for monthly sales of less than 100,000 yuan (inclusive)

Income from taxable sales to which the 3% levy rate applies, reduced by 1% levy rate for VAT purposes

Prepayment of VAT items subject to 3% pre-taxation rate, reduced to 1% pre-taxation rate

General taxpayers:

Taxable amount = Current output tax - Current input tax

Sales tax = sales × tax rate (applying 13%, 9%, 6%, etc.)

2. Corporate income tax

For small micro-profit enterprises (annual taxable income not exceeding 3 million yuan, number of people ≤ 300, total assets ≤ 50 million yuan):

The portion of annual taxable income not exceeding 1 million yuan: reduced by 25% to be included in taxable income and paid at the rate of 20% (effective tax burden of 5%)

The portion of annual taxable income exceeding 1 million yuan but not exceeding 3 million yuan: the same reduction is credited at 251 TP3T and paid at 201 TP3T tax rate (effective tax burden 51 TP3T)

3. Individual income tax (self-employed)

Individual income tax is reduced by half on the portion of annual taxable income not exceeding 2 million yuan

Can be stacked on top of other personal tax incentives

WARNING: The tax rates and incentives applicable to different taxpayer statuses vary greatly, and a wrong choice may result in tens of thousands of dollars in additional tax payments each year. Want to get exclusive taxpayer identity assessment and tax planning program? Scan the code to add WeChat jxhcyb or call 18148556832, we send you detailed measurement tools!

II. Taxation process

1. Tax registration

After the establishment of the enterprise, it is necessary to go to the tax authorities to apply for tax registration, fill in the tax registration form, submit the business license, organization code certificate, legal representative ID card and other information, and then issue the tax registration certificate after examination.

2. Determination of the tax period

Value-added tax (VAT): quarterly for small taxpayers and monthly for general taxpayers.

Enterprise Income Tax: Annualized, with monthly or quarterly advance payments

3. Tax returns

Preparation of filing materials: financial and accounting statements and explanatory materials, tax-related contracts, agreements and vouchers, electronic tax filing materials for tax-control devices, etc.

Fill in tax return: fill in VAT return, enterprise income tax return, individual income tax return, etc. according to the actual business situation.

Submission of declaration: you can choose to declare online or at the tax office of the tax authorities. After successful declaration, the system generates a declaration receipt or a notice of tax payment.

4. Payment of taxes

Based on the results of the declaration, the tax will be paid according to the stipulated period and methods, which include bank transfer, online banking, and third-party payment.

III. Tax incentives

1. “Six taxes and two fees” relief

For VAT small-scale taxpayers, small and micro-profit enterprises and individual businesses, the tax can be reduced within the range of 50% tax:

Resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp duty (excluding stamp duty on securities transactions), cultivated land occupation tax

Education surcharge, local education surcharge

2. Stamp duty exemption

Stamp duty exemption for loan contracts signed between financial institutions and small and micro enterprises.

Warm reminder: Most of the above incentives are implemented until the end of 2027, it is recommended to plan the company structure and business model in advance to fully enjoy the tax dividends. Want to get a complete list of tax incentives and declaration operation guide? Scan the code to add WeChat jxhcyb, we send you detailed information!

We provide domestic (Shenzhen, Guangzhou, Shanghai, Beijing, Hangzhou, etc.) company registration, overseas (Hong Kong, the United States, Japan, the United Kingdom, Singapore, Thailand, Vietnam, etc.) company registration, Hong Kong identity application and renewal services, while covering the cross-border tax planning, shareholding structure design, compliance and risk control programs, such as the whole chain of corporate services. Contact me anytime you need, Tel: 18148556832, WeChat: jxhcyb (can be added by direct search) or scan the QR code below to add!

put at the end

Small-scale taxpayers are exempted from VAT for monthly sales of less than 100,000 yuan, and the levy rate is reduced to 1%; the actual tax burden of enterprise income tax for small and micro enterprises is only 5%; and the personal tax for individual industrial and commercial households is reduced by half for less than 2 million yuan. Mastering the calculation method and declaration process of core taxes, and making full use of preferential policies such as “six taxes and two fees” can help you legally reduce tax burden and avoid risks.

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