The value-added tax rate for individual industrial and commercial households is 13%, 9% and 6% for general taxpayers and 3% for small-scale taxpayers. Personal income tax is subject to an excessive progressive tax rate of 5% to 35%.

Individual industrial and commercial households that implement audit collection shall calculate, declare and pay individual income tax in accordance with the provisions of the Measures for the Collection of Individual Income Tax for Individual Industrial and Commercial Households.

Individual industrial and commercial households include: (1) individual industrial and commercial households that have obtained business licenses for individual industrial and commercial households according to law and are engaged in production and operation; (two) individuals who are engaged in paid service activities such as running schools, medical care and consulting with the approval of relevant government departments; (three) other individuals engaged in individual production and operation.

Owners of individual industrial and commercial households are taxpayers of individual income tax.

Policies and regulations: The Calculation Method of Individual Income Tax for Individual Industrial and Commercial Households was promulgated by Order No.35 of State Taxation Administration of The People's Republic of China, and revised by Decision of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on Amending Some Rules of Tax Department on June 18, 2008.