1.Understand the concept and tax rate of the new tax: First, we need to understand what a "new tax" is and how it is calculated. According to the provisions of China**, individual income tax is levied on all kinds of income obtained by natural persons (i.e. citizens), including wages and salaries. The new principal tax is a tax levied on the taxable income related to production and business activities incurred by enterprises and individuals in China.
2.Basis of taxation of the new principal tax: The new principal tax adopts the comprehensive taxation method, and the balance of the total income of the taxpayer in each tax year minus the cost and expenses is used as the basis for calculating the tax payable. Among them, the total income refers to all the income obtained by the taxpayer from production or business activities;Deductions mainly include costs, expenses, losses and other expenses. Specifically, the basis for calculating the new tax can be divided into the following aspects:
VAT payable: According to the Provisional Regulations of the People's Republic of China on Value-Added Tax, taxpayers who sell goods or provide processing, repair and repair services and import goods shall pay VAT. Therefore, the formula for calculating the tax payable by the taxpayer is as follows:
Tax Payable = Taxable Income Applicable Tax Rate - Quick Deduction
Other taxable expenses: According to the provisions of relevant laws and regulations, taxpayers also need to pay some other taxes and fees, such as urban maintenance and construction tax, education surcharge, etc. These fees are calculated in a similar way to VAT and can be calculated according to the formula above.
3.The tax rate of the new tax: At present, China implements a personal income tax system that combines classification and comprehensiveness, that is, different tax rates are stipulated for different types of income. Among them, the applicable ratio of wages and salaries is 4% to 45%, and the applicable proportion of the production and business income of individual industrial and commercial households and the annual income of contracted and leased operations of enterprises and institutions ranges from 5% to 35%. In addition, for high-income groups, there is an excess progressive tax rate, which can go up to 7 levels.