Beijing Implements Local Education Surcharge
Jan. 2 – In November 2010, the Ministry of Finance issued a circular (caizong [2010] No. 98, “Circular 98”) unifying the local education surcharge (LES) at 2 percent for all enterprises and individuals (including FIEs).
Following the promulgation of Circular 98, Qingdao, Shanghai, Shenzhen and Guangdong Province started collecting the tax from the beginning of 2011. Beijing was slow to catch up, but will start levying LES as well starting from January 1, 2012.
With the imposition of LES, there will be altogether three surtaxes imposed in Beijing – the 7 percent urban maintenance and construction tax, 3 percent education surcharge, and 2 percent LES, bringing the total surtax rate to 12 percent. The surtaxes will be levied on the actual amount of turnover taxes (e.g. business tax and value-added tax) paid.
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