Taxes Every Coffee Shop Owner Must Pay in China

If you’re opening a coffee shop or running a café in China—whether it’s a specialty roastery café or a simple neighborhood spot—you’ll need to understand the taxes that come with it. Beyond just serving great coffee, staying compliant means knowing what portion of your revenue goes to taxes, and where.

In short: most coffee businesses in China will pay a 5% business tax on revenue, plus additional levies like city maintenance (1–7%), education surcharges (3%), and either corporate (up to 33%) or personal income tax (tiered up to 35%). Payroll taxes also apply based on employee salaries.

1. Business Tax on Revenue

The most direct tax your coffee shop will face is business tax. For the food and beverage sector—including cafés and coffee shops—this is set at 5% of your total turnover or gross revenue. This applies regardless of whether you're a chain or a single-location roaster-café.

2. Additional Local Levies Based on Business Tax

On top of the 5% business tax, you’ll also be responsible for several related local taxes:

• City Maintenance and Construction Tax: This is 7% of your business tax if you’re in a city, 5% in county-level areas, or 1% in rural regions.
• Education Surcharge: This is fixed at 3% of the business tax amount.
• Other Local Surcharges: These vary by location and may include further municipal fees.

3. Income Tax: Corporate vs. Personal Structures

How your coffee business is legally set up determines the income tax rate:

• Corporate Entities : Pay corporate income tax . The standard rate is 33% on taxable income (profits adjusted per tax law). However, there are reduced brackets: 27% for annual taxable income between 30,000–100,000 RMB, and 18% if your annual profit is under 30,000 RMB.
• Individual or Partnership Businesses : These pay personal income tax under a tiered, progressive structure:
  • Up to 5,000 RMB: 5%
  • 5,000–10,000 RMB: 10%
  • 10,000–30,000 RMB: 20%
  • 30,000–50,000 RMB: 30%
  • Over 50,000 RMB: 35%

4. Withholding Payroll Tax on Staff Salaries

If you have employees, you are required to withhold and remit their personal income tax from salaries. The withholding rates for employee income (excluding tax) are tiered as follows:

Frequently Asked Questions

What is the main tax for coffee shops in China?

The primary tax is a 5% business tax on your total revenue or turnover. This applies to all food and beverage businesses, including cafés and specialty coffee shops.

Are there extra taxes on top of the 5% business tax?

Yes. You’ll also pay a city maintenance tax (1–7% depending on location), a 3% education surcharge, and possibly other local surcharges based on your city or region.

Do I pay more tax if my coffee shop is profitable?

Yes. If structured as a corporation, profits over 30,000 RMB are taxed at up to 33%, with lower rates (27% or 18%) for smaller profits. If you’re a sole proprietor or in a partnership, personal income tax applies at progressive rates from 5% to 35%.

What if I have employees? What taxes apply to their salaries?

You must withhold personal income tax from employee salaries. The rate depends on their taxable income (before tax) and ranges from 5% to 45% based on a tiered bracket system with fixed deductions.

Does the tax rate change based on where my coffee shop is located?

Yes. City maintenance tax varies: 7% in cities, 5% in counties, and 1% in rural areas. Other local surcharges may also differ by municipality.

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