22+ Free TIHK CTA Paper 4 Practice Questions

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2026 Statistics

Key Facts: TIHK CTA Paper 4 Exam

HK$1,600

Exam Fee per Paper

TIHK 2026

3 Hours

Exam Duration

TIHK

50%

Passing Mark

TIHK

5 Years

Paper Pass Validity

TIHK

Chinese

Official Exam Language

TIHK (English study adaptation here)

TIHK CTA Paper 4 (PRC Tax) is a 3-hour closed-book written examination covering the taxation system of Mainland China. The exam fee is HK$1,600 per paper. While the official TIHK examination is written and answered in Chinese, this free English MCQ practice bank serves as a study adaptation for candidates seeking to master Chinese tax principles, statutory deduction limits, and tax computations.

Sample TIHK CTA Paper 4 Practice Questions

Try these sample questions to test your TIHK CTA Paper 4 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 22+ question experience with AI tutoring.

1Under the PRC Corporate Income Tax (CIT) Law, what is the standard statutory CIT rate applicable to resident enterprises?

A.15%

B.20%

C.25%

D.30%

Explanation: Under Article 4 of the PRC Corporate Income Tax Law, the standard corporate income tax rate for resident enterprises is 25%. Preferential rates apply to High and New Technology Enterprises (15%) and Small Low-Profit Enterprises.

2Under PRC CIT Law, what is the maximum deductible cap for employee welfare expenses as a percentage of total reasonable salaries and wages paid during the tax year?

A.2%

B.8%

C.14%

D.15%

Explanation: Under Article 40 of the Implementation Regulations of the PRC CIT Law, employee welfare expenses (职工福利费) incurred by an enterprise are deductible up to a maximum of 14% of total reasonable salaries and wages paid.

3Under the PRC Individual Income Tax (IIT) Law, how many days must a non-PRC domiciled individual reside in Mainland China in a tax year to be classified as a PRC tax resident subject to worldwide income tax?

A.90 days

B.183 days

C.270 days

D.365 days

Explanation: Under Article 1 of the amended PRC IIT Law (effective 2019), an individual who is not domiciled in China but resides in China for a cumulative total of 183 days or more in a tax year is a tax resident subject to PRC IIT on worldwide income (subject to the 6-year exemption rule for foreign income).

4Under the PRC Value-Added Tax (VAT) system, what is the standard VAT rate applicable to the sale of general goods and processing/repair services by a General VAT Taxpayer?

A.6%

B.9%

C.13%

D.17%

Explanation: Effective April 1, 2019 (Caishui [2019] No. 39), the standard PRC VAT rate for the sale of general goods, processing, repair, and replacement services, and leasing of tangible movable property is 13% (down from 16% and former 17%).

5Under PRC Land Value-Added Tax (LAT) regulations, what are the four progressive LAT tax rates levied on the appreciation amount derived from the transfer of real estate?

A.10%, 20%, 30%, 40%

B.20%, 30%, 40%, 50%

C.30%, 40%, 50%, 60%

D.15%, 25%, 35%, 45%

Explanation: Under Article 7 of the PRC Provisional Regulations on Land Value-Added Tax, LAT applies a four-tier progressive tax rate structure based on the appreciation percentage over deductible items: 30% (appreciation <= 50%), 40% (50% < appreciation <= 100%), 50% (100% < appreciation <= 200%), and 60% (appreciation > 200%).

6A PRC General VAT Taxpayer makes taxable sales of RMB 1,000,000 (excluding VAT) subject to 13% VAT. During the period, it verified creditable input VAT invoices totaling RMB 80,000. What is the net VAT payable?

A.RMB 50,000

B.RMB 130,000

C.RMB 80,000

D.RMB 210,000

Explanation: Net VAT Payable = Output VAT - Creditable Input VAT = (RMB 1,000,000 * 13%) - RMB 80,000 = RMB 130,000 - RMB 80,000 = RMB 50,000.

7Company C reports gross sales revenue of RMB 10,000,000. During the year, it incurred business entertainment expenses of RMB 100,000. Under PRC CIT Law, what is the maximum allowable deduction for business entertainment?

A.RMB 50,000

B.RMB 60,000

C.RMB 100,000

D.RMB 500,000

Explanation: Under Article 43 of the CIT Implementation Regulations, business entertainment is deductible at 60% of actual expenses (RMB 100,000 * 60% = RMB 60,000), but capped at 0.5% of annual sales revenue (RMB 10,000,000 * 0.5% = RMB 50,000). The lower amount (RMB 50,000) is the maximum allowable deduction.

8Under PRC IIT Law, what is the fixed monthly basic standard deduction (起征点) granted to residents against comprehensive income?

A.RMB 3,500 per month

B.RMB 5,000 per month (RMB 60,000 per year)

C.RMB 8,000 per month

D.RMB 10,000 per month

Explanation: Under Article 6 of the PRC IIT Law, the basic standard deduction for comprehensive income (salaries, labor services, author fees, royalties) is RMB 5,000 per month, totaling RMB 60,000 per tax year.

9Under the PRC Special Additional Deductions (专项附加扣除) for IIT, what is the fixed monthly deduction for a resident taxpayer supporting an elderly parent aged 60 or above (sole child)?

A.RMB 1,000 per month

B.RMB 2,000 per month

C.RMB 3,000 per month

D.RMB 4,000 per month

Explanation: Effective State Council adjustments (2023 update), the special additional deduction for supporting elderly parents (60+) by a sole child is RMB 3,000 per month (increased from RMB 2,000).

10Which of the following items is specifically non-taxable (不征税收入) under Article 7 of the PRC Corporate Income Tax Law?

A.Fiscal subsidies and administrative fees included in budget management

B.Interest income from bank deposits

C.Dividends received from a domestic resident enterprise

D.Gains from the sale of fixed assets

Explanation: Article 7 of the CIT Law specifies that non-taxable income includes fiscal appropriations, administrative fees, and government funds incorporated into budget management. Bank interest, property sale gains are taxable revenue; domestic dividends are tax-exempt (免税收入) under Article 26.

About the TIHK CTA Paper 4 Exam

Official qualifying examination paper for the Chartered Tax Adviser (CTA) designation in Hong Kong. Covers Mainland China Corporate Income Tax, Value-Added Tax, Individual Income Tax, Land Value-Added Tax, and tax administration.

Assessment

Performance-based assessment

Time Limit

3 hours

Passing Score

50%

Exam Fee

HK$1,600 (The Taxation Institute of Hong Kong (TIHK))

TIHK CTA Paper 4 Exam Content Outline

35%

Corporate Income Tax (CIT / 企业所得税)

Residency rules, 25%/15% rates, assessable income, non-taxable and exempt income, deduction caps, GAAR

25%

Value-Added Tax (VAT / 增值税) & Surcharges

General vs small-scale taxpayers, 13%/9%/6% rates, output/input VAT, input credit restrictions, export tax rebate

20%

Individual Income Tax (IIT / 个人所得税)

Comprehensive income progressive rates (3-45%), 183-day rule, special additional deductions (专项附加扣除), annual reconciliation

10%

Land Value-Added Tax (LAT / 土地增值税) & Real Estate Taxes

LAT 30-60% progressive rates, LAT deductible items and liquidation, Deed Tax, Real Estate Tax

10%

Stamp Duty, Customs Duty & Tax Administration

PRC Stamp Duty Law, customs valuation, import VAT, Tax Collection & Administration Law, e-invoicing (数电票)

How to Pass the TIHK CTA Paper 4 Exam

What You Need to Know

Passing score: 50%
Assessment: Performance-based assessment
Time limit: 3 hours
Exam fee: HK$1,600

Keys to Passing

Work through all 22 available questions
Review every answer and explanation
Track weak areas and revisit them
Use our AI tutor for tough concepts

TIHK CTA Paper 4 Study Tips from Top Performers

1Memorize statutory CIT expense deduction caps (employee welfare 14%, labor union 2%, employee education 8%, entertainment 60% up to 0.5% revenue, advertising 15%)

2Understand General VAT taxpayer input tax credit mechanics and non-creditable input tax categories

3Know the 7 IIT special additional deductions (children's education, continuing education, serious medical, mortgage interest, rent, elderly care, care for children under 3)

4Master the four-tier LAT progressive tax rates (30%, 40%, 50%, 60%) and allowable deduction items for property development

5Review the PRC Tax Collection and Administration Law provisions on e-invoicing (数电票), tax audit fines, and administrative review timelines

Frequently Asked Questions

What language is the official TIHK CTA Paper 4 exam?

The official TIHK CTA Paper 4 (PRC Tax) examination is conducted in Chinese (questions set and answered in Chinese). This website offers an English-language MCQ study adaptation to assist candidates studying tax concepts in English.

What topics are tested on CTA Paper 4 PRC Tax?

CTA Paper 4 tests PRC Corporate Income Tax (35%), Value-Added Tax and Surcharges (25%), Individual Income Tax (20%), Land Value-Added Tax and Real Estate Taxes (10%), and Stamp Duty, Customs Duty, and Tax Administration (10%).

How much is the exam fee for TIHK CTA Paper 4?

The examination fee for TIHK CTA Paper 4 is HK$1,600 per paper, payable directly to The Taxation Institute of Hong Kong.