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China Opens Public Consultation on Draft Local Surcharge Tax Law

China’s Ministry of Finance and State Taxation Administration have released a draft Local Surcharge Tax Law for public comment until September 27, 2026. Foreign founders operating in China should note the proposed rules on local surcharges and the opportunity to submit feedback.

China Seeks Public Input on New Local Surcharge Tax Law

China’s Ministry of Finance (MOF) and State Taxation Administration (STA) have jointly issued a draft of the Local Surcharge Tax Law of the People’s Republic of China (Draft for Comment) and are inviting public feedback. The consultation period runs until September 27, 2026. The draft was prepared to implement directives from the Third Plenary Session of the 20th Central Committee of the Communist Party of China, following research and broad solicitation of opinions.

For foreign founders registering or operating a company in China, this proposed law could affect the overall tax burden on businesses, as local surcharges are typically levied on top of certain taxes. Understanding the consultation process and the potential changes is important for compliance and financial planning.

Background and Purpose of the Draft Law

The draft law aims to formalize the framework for local surcharges, which are additional taxes imposed by local governments. The MOF and STA have developed the draft after careful study and by incorporating feedback from various stakeholders. The public consultation is a standard step in China’s legislative process, allowing individuals and organizations to review and comment on proposed regulations before they are finalized.

Key Details of the Consultation

• Consultation Period: The public can submit comments until September 27, 2026.
• How to Submit Feedback: There are two main channels:
  • Online: Through the MOF website (http://www.mof.gov.cn) via the Financial Regulations Management System (http://fgk.mof.gov.cn), or through the STA website (https://www.chinatax.gov.cn) under the “Interactive Communication—Opinion Solicitation” section on the homepage.
  • By Mail: Send comments to the Tax Policy Department of the MOF at No. 3 Sanlihe South Third Alley, Xicheng District, Beijing 100820, or to the Property and Behavior Tax Department of the STA at No. 5 Yangfangdian West Road, Haidian District, Beijing 100038. Please mark the envelope with “Comments on the Local Surcharge Tax Law of the People’s Republic of China.”
• Attachments: The draft law and an explanatory note on its drafting are available for review.

Foreign founders should consider reviewing the draft and, if relevant, submitting comments to ensure their perspectives are heard. The consultation is open to all, including foreign-invested enterprises.

Implications for Foreign Founders

Local surcharges are an integral part of China’s tax system. While the source text does not specify the rates or bases of these surcharges, foreign founders should be aware that such taxes can impact operational costs. The proposed law, once enacted, will provide a legal framework for these surcharges, potentially affecting how they are administered and collected.

For companies in the process of registering or already operating in China, it is advisable to monitor the progress of this legislation and assess any potential impact on tax liabilities. The consultation period offers an opportunity to gain early insights into the proposed rules and to engage with the authorities if needed.

Practical Steps for Foreign Founders

• Review the Draft: Access the draft law and explanatory note from the official websites to understand the proposed provisions.
• Assess Impact: Consult with local tax advisors to evaluate how the new law might affect your business’s tax obligations.
• Submit Comments: If you have concerns or suggestions, consider submitting them through the designated channels before the deadline.
• Stay Informed: Follow updates from the MOF and STA for the final version of the law and its implementation date.

ChinaMNC can assist foreign founders with navigating China’s tax regulations and ensuring compliance. For personalized guidance, feel free to reach out to our team.

Conclusion

The public consultation on the Local Surcharge Tax Law is a key step in China’s ongoing tax legislation reforms. Foreign founders should take advantage of the comment period to stay ahead of regulatory changes. By understanding the proposed law and its potential implications, businesses can better plan their operations in China.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.

Call to Action: Foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535 for help registering and operating a company in China.