China’s Stamp Duty: Rates, Regulations & Exemptions Explained

If you’ve ever signed a business contract, traded stocks, or bought property in China, you might have heard about stamp duty. 

At first glance, it seems like just another tax, but it actually plays a key role in legal transactions—and if you’re not careful, it can lead to unexpected costs or penalties.

The tricky part? Stamp duty rates aren’t always straightforward. Some transactions are taxed at different rates, while others might be completely exempt. 

Understanding how it works can help you avoid unnecessary expenses and ensure your documents are legally sound.

In this guide, we’ll walk you through everything you need to know about China’s stamp duty in China—what it is, how much you need to pay, exemptions you might qualify for, and common mistakes to avoid. 

By the end, you’ll have a clear picture of how stamp duty applies to your situation, whether you’re a business owner, investor, or just someone navigating China’s tax system.

What is China’s Stamp Duty?

Stamp duty is a transaction-based tax imposed on certain documents, agreements, and financial transactions. It serves two primary purposes:

• Revenue Generation: The Chinese government collects stamp duty to fund public services.
• Legal Recognition: Paying stamp duty validates contracts and ensures legal enforceability.

Legal Framework & Regulations

Stamp duty in China is regulated by the Interim Regulations of the People's Republic of China on Stamp Tax. These laws outline:

• Which transactions are taxable
• Applicable rates based on transaction type
• Who is responsible for paying the duty
• Exemptions and reductions

With the basics covered, let’s look at how stamp duty rates are structured.

Stamp Duty Rates in China (2025 Update)

Stamp duty rates vary depending on the type of transaction. Here’s a quick breakdown:

Did You Know? In August 2023, China reduced stock transaction stamp duty from 0.2% to 0.1% to boost market activity!

Understanding these rates is key, but which transactions are actually subject to stamp duty? 

Transactions Subject to Stamp Duty in China

Stamp duty in China applies to various financial, business, and property-related transactions. It serves as a legal validation for agreements and helps regulate market activities.

 Below are the most common types of transactions subject to stamp duty:

1. Business and Commercial Agreements

Stamp duty is levied on various business contracts to ensure their legal enforceability under Chinese law. This applies to:

• Sales contracts – Agreements for the sale and purchase of goods and services.
• Leasing agreements – Contracts for renting commercial or residential properties.
• Loan and mortgage agreements – Financial documents for borrowing and lending.
• Technology transfer contracts – Agreements related to patents, trademarks, and intellectual property.

2. Financial Transactions

Stamp duty plays a role in maintaining market stability and regulating financial transactions, particularly in stock trading. Transactions subject to stamp duty include:

• Stock and securities trading – Sellers pay a 0.1% stamp duty on each transaction.
• Foreign exchange transactions – Certain cross-border financial transactions may attract stamp duty.
• Futures and derivatives trading – Depending on regulatory updates, certain financial instruments may be subject to stamp duty.

3. Real Estate Transactions

Property transactions are among the most heavily taxed sectors when it comes to stamp duty. The amount due varies depending on the type of transaction and location. 

Common real estate-related transactions subject to stamp duty include:

• Property sale and purchase agreements – Applied when transferring ownership of land, commercial buildings, or residential properties.
• Lease agreements – Long-term lease contracts for both commercial and residential spaces.
• Mortgage contracts – Stamp duty is imposed on mortgage agreements for securing property loans.

Ever encountered China's Value Added Tax and wondering what it's for? Read our guide on China Value Added Tax

Exemptions & Reductions in China’s Stamp Duty

Not all transactions are subject to full stamp duty payments. The Chinese government offers exemptions and reductions for certain industries and special situations.

Common Stamp Duty Exemptions

• Government contracts and public service agreements
• Mergers and restructuring transactions under specific conditions
• Small business incentives (Certain startups qualify for reduced rates)

Pro Tip: If your business falls into one of these categories, ensure you apply for exemptions correctly to maximize savings.

Now that we know who must pay stamp duty and who is exempt, let’s discuss how to calculate and pay the tax correctly.

Curious about how taxation works in China? Explore our detailed guide on China Taxation Rates here

How to Calculate and Pay Stamp Duty in China

Stamp duty calculations depend on transaction value and applicable rates. Follow these steps to ensure proper filing:

Step 1: Identify the Applicable Rate

Each transaction type has a specific tax rate based on the latest regulations: (Refer to the table above.)

Step 2: Calculate the Duty Amount

Once you have the applicable rate, calculate the duty amount using the formula:

Formula:

Stamp Duty = Transaction Value × Stamp Duty Rate

📌 Example: If a company signs a business contract worth ¥1,000,000 and the applicable stamp duty rate is 0.05%, the payable stamp duty would be:

¥1,000,000×0.0005=¥500

Step 3: File and Pay the Tax

• Where to Pay: Stamp duty must be filed and paid at the local tax bureau or via China’s online tax system.
• Payment Methods: Accepted methods include bank transfers, Alipay, WeChat Pay, or direct payment through tax authorities' digital platforms.

🚨 Late payments may lead to penalties, including fines and interest charges, so it’s crucial to file on time.

Common Mistakes & How to Avoid Stamp Duty Penalties

Stamp duty violations can result in financial and legal consequences. Avoid these common mistakes:

• Underpayment or miscalculation – Incorrect tax rates can lead to back payments.
• Failure to meet payment deadlines – Late payments accrue interest and penalties.
• Incorrect transaction classification – Misfiling can result in additional tax burdens.
• Lack of proper exemption documentation – Missing paperwork may forfeit tax benefits.

Penalties for Non-Compliance

• Fines ranging from 0.05% to 0.1% of unpaid stamp duty.
• Legal action or increased tax audits for repeated violations.

To prevent issues, businesses and investors should stay updated on regulations and work with experts for tax planning.

Conclusion

Stamp duty in China is a key part of the tax system, impacting business contracts, real estate transactions, and stock trading. Understanding current rates, exemptions, and compliance rules can help businesses and investors avoid unnecessary costs and legal risks.

With periodic adjustments, such as the recent reduction in stock trading stamp duty, it's important to stay updated on policy changes. Whether you’re a business owner, an investor, or a foreign company entering the Chinese market, paying the correct stamp duty ensures smooth and legally valid transactions.

However, miscalculations and missed payments can lead to fines or financial losses. If you're unsure about how stamp duty applies to your transactions—or if you're looking for ways to legally reduce your tax burden—expert advice can save you time and money.

If you need help with tax planning, exemptions, or compliance, Choi & Partners is here to guide you.

Frequently Asked Questions

Who is required to pay stamp duty in China?

Stamp duty in China is typically paid by both parties in a transaction, depending on the type of agreement. For example, in stock trading, the seller pays the tax, whereas in real estate transfers, both the buyer and seller may be responsible. The specific tax obligations vary by contract type.

Are there penalties for late stamp duty payments?

Yes. Failure to pay stamp duty on time can result in penalties, including interest charges and additional fines. The tax authorities can also impose legal consequences for businesses or individuals who repeatedly fail to comply. To avoid issues, payments should be made within the required deadlines.

Can businesses apply for stamp duty exemptions?

Yes, certain businesses, such as startups, tech firms, and government-related projects, may qualify for partial or full exemptions. However, to benefit from these exemptions, companies must file proper documentation with the tax authorities and ensure their transactions meet the exemption criteria.

How does stamp duty impact foreign investors in China?

Foreign investors should consider stamp duty costs when trading stocks or acquiring businesses in China. While stamp duty rates for stock trading were reduced in 2023, property transactions and business acquisitions still attract standard stamp duty fees. Understanding these costs is crucial for making informed investment decisions.