Registration requirements and fees
Are there any registration requirements, or any fees/taxes payable?
For retail stores conducting promotions in relation to a store opening, festival celebration or store anniversary celebration etc, unless the retails store's premises is less than 3,000m2, the promotion must be filed with the Administration for Industry and Commerce within 15 days after the promotion is finished.
Fees / Taxes Payable
There are no fees payable.
The grant of prizes is generally deemed as sales of goods for PRC enterprise income tax (EIT) and value-added tax (VAT) purposes, and therefore may subject the enterprise promoter to PRC EIT and VAT.
The individual winner is generally liable to PRC individual income tax (IIT) (normally at the tax rate of 20%) if the winner receives the prizes for free. Such IIT should be withheld by the enterprise promoter.
If the tangible prize needs to be brought into China from overseas, it may trigger additional PRC import taxes (such as import VAT, consumption tax, and customs duties).
The above PRC tax implications may vary depending on each case.