Income tax on rent, worked example, in China
| Non-resident couple´s joint monthly rental income1 | US$1,500 | US$6,000 | US$12,000 | |
| Annual Rental Income | 18,000 | 72,000 | 144,000 | |
| = Taxable Income | 18,000 | 72,000 | 144,000 | |
| Income Tax Rates2 | ||||
| Integrated rate | 5%3 | 900 | 3,600 | 7,200 |
| Annual Income Tax Due | US$900 | US$3,600 | US$7,200 | |
| Tax Due as % of Gross Income | 5.00% | 5.00% | 5.00% | |
Thanks to:
 |
||||
DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on March 5, 2007.
Notes
Grant Thornton China is a correspondent firm of Grant Thornton International. Grant Thornton International is not a worldwide partnership. Correspondent firms of the international organization are independently owned and operated.
1 The property is jointly owned by husband and wife.
2 In general, leasing property is subject to Business Tax (BT), Individual Income Tax (IIT), and Real Estate Tax (RET). In addition to these 3 types of taxes, some other types of taxes and surcharges may also be imposed on the rental income varying from city to city. In Shanghai, City Construction Tax and Education Surcharge are the additional payments imposed on the rental income on top of the abovementioned major taxes. The BT is imposed on gross income at 5%, the RET is also imposed on gross income at 12%, while the IIT is usually imposed on the rental income after particular expenses deductions and allowances.
3 However, all the mentioned taxes and surcharges imposed on the rental income from leasing properties in Shanghai have been levied at an integrated rate of 5% on the gross income since 01 August 1999. Confirmed with the Shanghai Tax Bureau, the integrated tax rate of 5% is applied to both residents and non-residents of China.