Inspection on the East Building
Tax official: We are from the foreign taxation bureau. We'd like to leam some information of the East Building project.This is my certificate.
Taxpayer: Welcome to our office.I will try to meet your demands.
Tax official: We heard that your company has contracted to construct the East Building project. Is that right?
Taxpayer: No. My company is only responsible for the organization work of the building. Tax official: How did your company pay tax?
Taxpayer: We paid the business tax on the income we received，according to the service industry of the tax law.
Tax official: Could you provide the voucher and contract related to the building project?
Taxpayer: Just a moment.Here you are.
Tax official: Thank you.Look,the document indicates that your company is the general contractor of the building.
Taxpayer: In fact,my company transferred the project to some subcontractors.
Tax official: As the general contractor,your company should pay business tax according to the construction industry of the tax law.
Taxpayer: How to determine the taxable income?
Tax official: The taxable income is calculated as the whole contract income minus the parts paid to the subcontractors.
Taxpayer: The rate of the service industry is 5% and the tate of construction industry is 3%. That means my company overpaid the business tax. Is that right?
Tax official: Yes, it is true.But on the other hand，the business tax law stipulates that the general contractor is obliged to withhold the tax when paying to the subcontractors. If your company fails to do,it will not only pay the missing tax but also face the penalty.
Taxpayer: The amount of the tax is too large.The project has been completed already and my company is registered outside of china.
Tax official: In this case,your representative office must take the responsibility in place of your company.s
inspection 检查, 视察
service industry 服务业
voucher 收据， 凭单
indicate 表明， 指出
general contractor 总承包商
construction industry 建筑业
on the other hand 在另一方面
take the responsibility 承担责任
in place of 替，代替