1. TAXPAYER
Income tax on corporate business refers to the income tax imposed on domestic enterprise. The taxpayers that subject to the tax are enterprises or organization which are independently economically accountable entities, including state-owned enterprises, collective enterprises, private enterprises, joint enterprises, joint-stock companies and other organizations with operational income and other income.
State-owned enterprises are enterprises owned by the people through public agencies and governmental bureaus and registered pursuant to relevant government regulations.
Collective enterprises that's mean of production is collectively owned.
Private enterprises are enterprises whose means of production are owned by
individuals.
Joint enterprises are enterprises owned by several parties.
Joint-stock enterprises are enterprises whose registered capital is in the form of stock.
Other organizations are entities with production, operation and other income, such as institutions and social groups.

2. BASIS OF ASSESSMENT
Taxable income =Total income -- deductible items
The total income includes income from production and operation, income from property transfers, income from interest, leasing, royalties, dividends and other income that obtained within and outside China. To avoid double taxation, tax paid overseas can be used as a tax credit.
The total income includes:
Income from production and operation refers to the revenue from the taxpayer's major business activities. It refers to the income from sales of goods, services
rendered, operation, construction, other activities.
Gain on property transfer refers to the gain on the disposal of fixed assets, investment, inventories and intangible assets.
Interest refers to the income from bank deposit, bonds, debtors and others.
Leasing refers to the rental income from fixed assets, packaging, and other property.
Royalties refer to the income from providing or transferring patent, trademark, copyright and proprietary technology.
Investment refers to the dividends, etc. from investment in stock company.
Other income refers to the gain from disposal of fixed assets, cash or inventory, Penalty receipt , non settlement of creditor due to the creditor¡¯s reason, refund of Education surcharge.
If the amounts of discount and the sales are printed on the same invoice, the discount can be net off to arrive a net sales figure. if it is not printed on the same invoice, the discount cannot be deducted.
Any deduction or refund of turnover taxes is taxable under the corporate income tax.
Any use of the self-manufactured products for construction or staff welfare purpose is deemed as income of the taxpayer.
Any grant from the government should be included into the income in the year of money receipt.
Any income generated from the construction in progress should be included in the total income but not to set off the cost of construction in progress.
Any non-monetary consideration must be valued according to the market value and included into the total income.
Interest from government bonds is not taxable but other bonds, like enterprises bond is taxable.
Donation receipt in form of assets can be treated as capital reserve and not subject to income tax at the time of receipt. It becomes taxable at the time of transfer of that assets or liquidation at the higher value of transfer price and the value of the assets at the time of donation receipt.
For the payment by installments, the time for income can be recognized at the delivery of the product or the date of invoices issuance or the payment date specified in the sales contract.
For installation of machinery, construction, ship building that lasting over 1 year, income can be recognized according completion percentage method.