If my company receives an income for consulting services from a company, what is the income tax on it?

Base

Chinese enterprise income tax(EIT) is calculated on the basic of the annual operation result not just one transaction.

Each quarter the company needs to prepay EIT based on the accounting profit.

After the year-ending, the company needs to do settlement of enterprise income tax. The settled tax amount shall be calculated on the basic of the annual accounting profit after making tax adjustment(taxable profit).

Rate

The standard EIT tax rate is 25%.

There is a preferential EIT tax rate for small or media sized enterprise(SME) as of 31th, Dec. 2021. If SME taxable profit is less than 1 million, the EIT actual tax rate is 5%. If SME taxable profit is less than 3 million, the actual EIT tax rate is 10% for the portion large than 1 million.

#Enterprise income tax on service income