City Maintenance/Construction Tax

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14 City Maintenance/Construction Tax





This tax is levied for the purpose of expanding and stabilizing the source of funds for city maintenance/construction, and strengthening city maintenance/construction. The Provisional Regulations of the People's Republic of China on City Maintenance and Construction Tax (CMCT) were promulgated by the State Council on February 8, 1985, and came into effect on January 1, 1985.

CMCT is administered by the State Administration of Taxation (SAT) and collected by the local tax bureaus. The revenue collected is shared between the central government and the local governments. In 2003, revenue from CMCT amounted to 55 billion yuan, accounting for 2.7% of the country's total tax revenue.


Entities Subject to Tax

Any of the following entities, excluding enterprises with foreign investment, foreign enterprises, and foreigners, that are obliged to pay Value-Added Tax (VAT), Consumption Tax, and/or Business Tax may be subject to CMCT.

  • State-owned enterprises (SOEs), collectively-owned enterprises, private enterprises, joint-equity enterprises, and other enterprises.
  • Administrative units, non-profit institutions, military units, social organizations, and other units.
  • Individual businesspersons and other individuals.

Withholding Agents

The withholding agents of VAT, Consumption Tax, and/or Business Tax are also the withholding agents of CMCT.

Enterprises with foreign investment, foreign enterprises, and foreigners are excluded.


Rates vary depending on whether the taxpayers are located in cities, counties, towns or other areas.

Table 14.1 Tax rates
RegionRate (%)
Counties and towns5
Other areas1


Tax payable is calculated based on the actual amount of VAT, Consumption Tax, and/or Business Tax paid, and is paid together with these three taxes.

CMCT should also be levied on VAT exemptions or credits approved by the tax department for goods exported by production enterprises.

Computing Tax Payable

In general, the following formula is used to calculate tax payable:

Tax payable = Tax base × Applicable tax rate


A State enterprise in Shanghai City is liable to pay VAT and Business Tax totaling 10 million yuan for the month. The applicable CMCT rate is 7%.

Tax payable = 10 million yuan × 7% = 0.7 million yuan


General Guidelines

CMCT is collected/reduced/made exempt in tandem with the collection/reduction/exemption of VAT, Consumption Tax, and/or Business Tax.

Where tax refunds are given because of reductions or exemptions of VAT, Consumption Tax, and/or Business Tax, CMCT that has been paid shall be refunded at the same time.

Imported/Exported Goods

Customs shall not collect CMCT when collecting VAT or Consumption Tax on imported goods.

However, CMCT shall not be refunded when VAT or Consumption Tax are refunded for exported goods.

Services/Commercial Retailing Enterprises

Exemptions may be granted for 3 years to new services enterprises and commercial retailing enterprises where they employ retrenched workers in accordance with prevailing rules, or to retrenched workers engaged in individual household businesses who meet the criteria for specified projects.

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City Maintenance/Construction Tax

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City Maintenance/Construction Tax