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China Seeks Public Comment 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 until September 27, 2026. Foreign founders operating in China should note the proposed codification of local surcharges and can submit feedback through official channels.

China Releases Draft Local Surcharge Tax Law for Public Comment

On August 28, 2026, China’s Ministry of Finance (MOF), together with the State Taxation Administration (STA), published a draft of the Local Surcharge Tax Law of the People’s Republic of China (《中华人民共和国地方附加税法（征求意见稿）》) for public consultation. The draft is part of the implementation of decisions from the Third Plenary Session of the 20th Central Committee of the Communist Party of China. The deadline for submitting comments is September 27, 2026.

For foreign founders registering or operating a company in China, the proposed law is relevant because local surcharges are levied on top of certain taxes and can affect overall tax compliance and cost calculations. This article summarizes the official announcement and explains how to participate in the consultation.

Background and Purpose of the Draft Law

The MOF and STA stated that the draft was formulated after careful research and extensive solicitation of opinions and suggestions. The proposed law aims to provide a legal framework for local surcharges, which are currently imposed under existing regulations. The draft is accompanied by an explanatory document (起草说明) that details its drafting. The full text of the draft law and the explanation are available as attachments to the announcement.

Although the source text does not specify the exact scope or rates of the local surcharges, foreign-invested enterprises should be aware that such surcharges typically apply to taxes such as value-added tax and consumption tax. The new law, once enacted, would elevate the current rules to a statutory level, potentially affecting compliance obligations for all companies, including those with foreign investment.

How to Submit Comments

The government invites public feedback on the draft law. Foreign founders and other stakeholders can submit their opinions before the deadline through the following official channels:

• Online: Visit the MOF website (http://www.mof.gov.cn) and access the “Financial Regulations Management System” (http://fgk.mof.gov.cn), or go to the STA website (https://www.chinatax.gov.cn) and use the “Interactive Communication – Opinion Solicitation” section on the homepage.
• By mail: Send written comments to either:
  – Tax Policy Department, Ministry of Finance, No. 3 South Sanxiang, Sanlihe, Xicheng District, Beijing 100820; or
  – Property and Behavior Tax Department, State Taxation Administration, No. 5 West Yangfangdian Road, Haidian District, Beijing 100038.
  Please mark the envelope with “Comments on the Local Surcharge Tax Law of the People’s Republic of China (Draft for Comment)”.

All submissions must be received by September 27, 2026. The announcement does not specify whether comments can be submitted in languages other than Chinese, so foreign founders may consider submitting in Chinese or seeking translation assistance.

Implications for Foreign Founders

While the draft law is still under consultation, foreign founders should monitor its progress. Local surcharges are an additional cost on top of major taxes, and a clear legal framework can help businesses plan their tax liabilities more accurately. The codification may also bring greater transparency and consistency in how local surcharges are administered across different regions.

Companies with operations in multiple provinces should pay attention to how the law might affect local fiscal policies, as surcharges are often used to fund local public services. The draft law, if passed, could standardize the basis and collection of these surcharges nationwide.

Next Steps and Practical Guidance

Foreign founders are encouraged to review the draft law and its explanatory note (available on the MOF and STA websites) and to consider submitting comments if they have concerns about compliance or operational impact. Given that the consultation period ends on September 27, 2026, timely action is advisable.

For ongoing compliance, foreign-invested enterprises should ensure that their tax calculations correctly account for local surcharges as currently applied. Once the new law takes effect, any changes to rates or scope will need to be incorporated into accounting and reporting systems.

ChinaMNC provides assistance to foreign founders with company registration, tax compliance, and regulatory updates. For personalized support, contact us via WhatsApp or WeChat at +86 153 1898 8535.

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