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China Solicits Public Comments 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, open until September 27, 2026. Foreign founders should note this development as it will affect local tax obligations.

China Releases Draft Local Surcharge Tax Law for Public Comment

China's Ministry of Finance (MOF), in conjunction with the State Taxation Administration (STA), has drafted the Local Surcharge Tax Law of the People's Republic of China (Draft for Comment). The draft is now open for public feedback until September 27, 2026. This move follows the arrangements of the Third Plenary Session of the 20th Central Committee of the Communist Party of China, as stated in the official announcement.

For foreign founders registering or operating a company in China, this is a regulatory development worth monitoring. The draft law, once enacted, will govern local surcharge taxes, which are typically levied alongside major taxes such as VAT and consumption tax. Understanding these obligations is essential for compliance and financial planning.

Background and Purpose of the Draft Law

The MOF and STA prepared the draft after careful research and broad solicitation of opinions and suggestions. The official notice emphasizes that the draft is part of implementing the decisions of the Third Plenary Session. While the source text does not detail specific provisions of the draft, the very fact that a separate law is being considered indicates a continued effort to formalize local tax surcharges within China's legal framework.

Foreign investors should note that local surcharges are an additional layer of taxation on top of national taxes. They are often calculated as a percentage of the VAT or consumption tax payable. The new law, if passed, may bring changes to rates, bases, or collection mechanisms, so staying informed is prudent.

How to Submit Comments

The government has provided clear channels for the public, including foreign businesses and individuals, to submit feedback on the draft. Comments must be submitted by September 27, 2026. The official notice lists the following methods:

• Online submission: Through the MOF website (http://www.mof.gov.cn) via the Fiscal Regulations Management System (http://fgk.mof.gov.cn), or through the STA website (https://www.chinatax.gov.cn) under the "Interactive Communication – Opinion Collection" section on the homepage.
• By mail: Send letters to the Tax Policy Department of the MOF at No. 3, South Sanxiang, Sanlihe, Xicheng District, Beijing (Postal Code: 100820), or to the Property and Behavior Tax Department of the STA at No. 5, Yangfangdian West Road, Haidian District, Beijing (Postal Code: 100038). Please mark the envelope with "Comments on the Local Surcharge Tax Law of the People's Republic of China."

Foreign founders who wish to express their views on how the new law might affect their operations in China can use these official channels. It is advisable to submit comments in Chinese or with a Chinese translation to ensure they are fully understood.

What This Means for Foreign Founders

Although the draft text itself is not summarized in the source, the initiation of a public comment process signals that the law is moving through the legislative pipeline. Foreign founders should be aware that local surcharge taxes are a standard part of the tax burden for businesses in China. These surcharges are typically imposed at the local level and are calculated based on the amount of national taxes paid.

For companies in the process of registering or already operating, it is important to factor in all tax obligations, including local surcharges, when budgeting and planning. The new law could potentially clarify or modify the scope and application of these surcharges, which may impact overall tax costs. Keeping abreast of such regulatory changes is part of maintaining good compliance.

Foreign founders are encouraged to consult with local tax advisors or legal professionals to understand how the draft law, once finalized, might apply to their specific situation. The public comment period offers an opportunity to gain early insight into the upcoming rules.

Official Contacts and Resources

The official notice also provides a list of provincial tax service sub-sites and affiliated units, but these are standard website navigation elements. For the purpose of this article, the key information is the draft law and the comment submission process.

The announcement was jointly issued by the MOF and STA on August 28, 2026. The draft law and its explanatory notes are available as attachments on the official websites. Foreign founders can access these documents to review the full text, though they are in Chinese.

Conclusion

The draft Local Surcharge Tax Law is a development that foreign founders should monitor. While the immediate action required is limited to those who wish to submit comments by September 27, 2026, the eventual law will likely affect the tax compliance landscape for all businesses in China. Staying informed and seeking professional advice is recommended.

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

For assistance with company registration and ongoing operations in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.