news Chinese Government Charges Tax On Domains... Now Considered Assets

[Silentptnr]

I read a little article over on Domain Gang. Pretty interesting. Thought I would share.

New six percent tax in China : Domains are now “intangible assets”
On July 1st, China introduced a 6% tax levy on domain names, and this is good news.

Some might wonder, how would an act of “Communist Capitalism” such as this be “good news” for the Chinese domain investors?

Very simple....

You can read the rest of the article here: http://domaingang.com/domain-news/new-six-percent-tax-in-china-domains-are-now-intangible-assets/

 

[betthelot]

6 percent is very low tax. If that's the tax on profits gained from trading an intangible asset.
In the UK its 20% tax (for limited companies), probably more in US.

 

[betthelot]

Looking at it in more detail it appears to be a sales tax. ie if a Chinese person sold a domain to another Chinese investor they would add 6% sales tax (vat as we call it) but the buyer and seller can offset that against their own VAT returns.
It appears domains to be the lowest category for VAT at 6% as some goods and services are at 17%.
It seems to be a move away from business tax by China to stop the real estate bubble.
Need more detail from a Chinese person to understand the implications but on the face of it looks OK

 

[TheWatcher]

I read a little article over on Domain Gang. Pretty interesting. Thought I would share.

New six percent tax in China : Domains are now “intangible assets”
On July 1st, China introduced a 6% tax levy on domain names, and this is good news.

Some might wonder, how would an act of “Communist Capitalism” such as this be “good news” for the Chinese domain investors?

Very simple....

You can read the rest of the article here: http://domaingang.com/domain-news/new-six-percent-tax-in-china-domains-are-now-intangible-assets/

I don't consider it as good news, especially for 6% tax for buying a domain name or owning one to register?
Other way, it's bad.

 

[betthelot]

I don't consider it as good news, especially for 6% tax for buying a domain name or owning one to register?
Other way, it's bad.

it depends - the corporation tax/business rate I think was 5% on profits for domains. Which has been replaced with a 6% sales tax which you can offset. Of course, if you were using domains to evade tax then it makes little difference but as a legit business seeking investors, a Chinese accountant would need to outline the pros and cons.

 

[Furquan]

This is how every government work, they just charge tax on everything.