Summary

Implementation measures for China's new private education law - which legalised for-profit education at non-compulsory education levels - have been issued by the Ministry of Education and by 15 provinces, including many of China's largest education markets. Although implementation measures in different parts of the country have many similarities, there are some notable differences between provinces.

Several tax incentives for non-profit schools from the kindergarten to higher education level were set out at the national level: these schools do not pay corporate income tax, property tax or land usage taxes, and individual and corporate donations to these schools can qualify for income tax deductions. However, the finer details vary from province to province. For example, Liaoning provides tax incentives for technology transfers to non-profit schools, while four provinces exempt these schools from VAT.

Policies regarding fees also vary by region. In most cases prices at for-profit schools can be set according to market demand, but Liaoning and Anhui require government approval and Hubei also requires approval for changes to fees charged to students who were already enrolled when the new regulations were adopted. In non-profit schools the situation is more complicated, with some provinces such as Yunnan and Inner Mongolia allowing schools to set their own prices while most others continue to require approval from the relevant pricing bureau.

The policies also set out the deadline for registering an existing private school as either a for-profit or non-profit institution. Most provinces' deadlines vary from the end of 2020 to the end of 2022, although Hubei requires a decision to be made the next time the school renews its registration which is on a three-year cycle.

The linked source (in Chinese) gives a breakdown of the regulations introduced by 15 provincial-level regions regarding tax incentives, land usage policies, fee approval, regulations surrounding closing schools, and the transition period to register existing private schools as having either non-profit or for-profit status.

Analysis by Kevin Prest, Senior Analyst, International Education Services

In general, regulations for non-profit schools continue to be similar to those that have been in place prior to the new private education law. One notable change for non-profit schools is that three provincial-level regions - Yunnan, Inner Mongolia and for new students in Hubei.

Although China now supports for-profit schools outside the compulsory education age range, treating these as businesses means that their tax situation is less attractive than their non-profit counterparts. There are also significant variations by region, meaning that anyone considering setting up a for-profit school should pay close attention to the regulations in the relevant province as well as at the national level.

Source

1. 15 Different Provinces’ implementation regulations (in Chinese):

1) Liaoning: http://www.ln.gov.cn/zfxx/lnsrmzfgb/2017/qk/d21q/szfwj/201712/t20171207_3126522.html

2) Anhui: http://www.ahedu.gov.cn/30/view/357295.shtml

3) Gansu: http://www.gansu.gov.cn/art/2017/11/14/art_4785_326397.html

4) Tianjin: http://zfgb.tj.gov.cn/2017/system/2017/12/15/010002058.shtml

5) Yunnan: http://www.yn.gov.cn/yn_zwlanmu/qy/wj/yzf/201712/t20171222_31441.html

6) Hubei: http://www.hubei.gov.cn/govfile/ezf/201712/t20171228_1238492.shtml

7) Zhejiang: http://www.zj.gov.cn/art/2018/1/5/art_32431_295889.html

8) Shanghai: http://www.shanghai.gov.cn/nw2/nw2314/nw2319/nw12344/u26aw54537.html?from=timeline&isappinstalled=0

9) Hebei: http://info.hebei.gov.cn/eportal/ui?pageId=6778557&articleKey=6768109&columnId=329982

10) Inner Mongolia: http://www.nmg.gov.cn/xxgkml/zzqzf/gkml/201801/t20180105_655598.html

11) Shaanxi: http://www.gov.cn/xinwen/2018-02/06/content_5264186.htm

12) Henan: http://www.henan.gov.cn/zwgk/system/2018/02/23/010768866.shtml

13) Hainan: http://www.hainan.gov.cn/hn/zwgk/zfwj/szfwj/201802/t20180213_2553577.html

14) Jiangsu: http://www.jiangsu.gov.cn/art/2018/3/1/art_46143_7498102.html

15) Guangdong: http://zwgk.gd.gov.cn/006939748/201805/t20180504_763454.html