By Victor Tu

Stamp Duty was invented in 1624 in Netherland. It is one of the oldest taxes in the world and imposed in many countries nowadays. The basic rule is that tax is charged based on the amount on the contract with specific percentage. Today we would like to talk about it since many people always ignore it in China.  

Q: Is it charged by Local tax bureau or State tax bureau?

A: Stamp Duty is local tax and belongs to the local government, but the stamp duty on security transactions is shared with the central government, 97% levied by State and 3% imposed by Local.

Q: What kind of business contracts will be charged for Stamp Duty?

A: There are 13 types of the contracts you sign will be charged.

1.     Purchase and Sale

2.     Processing and Contracting

3.     Surveying and designing

4.     Construction

5.     Property Lease

6.     Logistics

7.     Warehousing and Storage

8.     Loan

9.     Property Insurances

10.  Technical development , sale, consulting and service

11.  Sale of property, copyrights, trademark, patents, security, etc.

12.  Accounting Ledgers

13.  Certificates (Deed of property, Land, etc.)

Q: What‘s the rate on the Stamp Duty?

A: Stamp Duty applies low tax rate, and with two types

1.     Percentage :

0.005% for Item 8

0.03% for Item 1/4/10

0.05% for Item 2/3/6/11/12*

0.1% for Item 5/7/9

The base amount for calculation is the monetary number on the contract.

*For Item 12 stands for the paid-in capital amount, premium of capital amount, etc. 

2.     Fixed amount：Only RMB 5/pcs, which applies to Item 12 and 13.

Q: How should I pay Stamp Duty on the purchase and sales contracts since our company signs a number of contracts per year?

A: In practice, it is hard for the company to record each contract on purchase and sale, so the tax bureau is using the flat rate on the sales, for example, a company recognizes the sale RMB 1,000,000 in November, 2017, the tax bureau will charge you RMB 1,000 for stamp duty (so far, in Ningbo, 0.1% percentage is applied and in some Districts even offering plus 20% off). Even though, you still have to pay attention to your loan or lease or insurances contracts, because these odd contracts are easily ignored on paying stamp duty.

If you still have any other questions on Stamp Duty ,please feel free to contact us on (0574)2788 3475 or send your email to request@victortruman.com and visit our website on www.victortruman.com

Keywords: Ningbo accounting, Ningbo Auditor, Ningbo accountants, Ningbo CPA, Accountants who speak English in Ningbo

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Victor & Truman，CPAs  宁波纬度会计师事务所（普通合伙）