Business Alert – China

Qingdao lowered its business tax for the entertainment industry as of 1 October 2011. Tax is levied in two tiers after this adjustment, with the tax rate lowered from 20% to 10% for golf and to 5% for other entertainment businesses.

Business tax on entertainment covers entertainment venues such as music lounges, dance halls, music cafes, billiard parlours, golf courses and amusement facilities, and businesses that offer entertainment to customers. A flat rate of 20% was levied before the adjustment.

The tax cut is generally welcomed by the industry. With a business tax of 20% on top of other taxes and fees, entertainment enterprises shouldered a heavy tax burden before the adjustment. With tax burden reduced by as much as 75% after the adjustment, they are able to save a lot on tax payment each month.

While reducing the tax burden of business operators, the lowering of the business tax rate for entertainment enterprises will aggravate market competition and division and boost the rapid and sound development of the entertainment industry in the city. It will also hasten the development of the tertiary industry and promote a more leisurely lifestyle in society, said industry experts.