China Company Accounting and Tax Outsourcing Services Tel:0755-82148419 susiehu@citilinkia.com
The China company's annual compliance requirements start after the end of the fiscal year (31 December as China follows the calendar year), and usually take place until the end of June.
Annual tax filing
The next step following the audit report is to proceed with the annual corporate income tax (CIT) filing. The standard rate of the CIT is 25% on profits. However, this rate might vary depending on the size of the company and the industry in which it operates. CIT is paid on a quarterly basis during the year; the annual CIT reconciliation ensures that the tax has been fully paid in the previous year and verifies if additional tax might need to be paid or a reimbursement made. The deadline to submit the yearly tax reconciliation is at the end of May. Once this step is completed, it is important to note that foreign companies can proceed to distribute and repatriate profits.
Annual reporting procedure
Once the annual audit report and CIT reconciliation are completed, companies need to proceed with submitting information to several government authorities, such as the Ministry of Commerce (MOFCOM), the State Administration for Market Regulation of Industry and Commerce (SAMR), the State of Foreign Exchange (SAFE) and the Finance Authority and Customs Authority (for trading companies). This is to ensure that companies are compliant and that the information related to each department is updated.
The relevant information and documents required for the annual reporting procedure include basic information on the company, top-level financial data, investments, and UBO (Ultimate Beneficial Owner) information. Depending on where the company has been registered and the business scope, additional documents may be required.
The deadline to submit the annual reporting is at the end of June. If a company fails to submit its annual report before the deadline, it will be listed into the SAMR abnormal list. After three consecutive years of not submitting an annual report, it will be considered a serious legal violation and in the worst-case scenario, a company may have its business license revoked
1. The company will be included in the abnormal list, and this bad record will always exist even if the annual inspection is supplemented in the future;
2. Without annual inspection for three consecutive years, the company will be revoked and unable to return to normal, and can only be cancelled;
3. The enterprise cannot make any changes, such as address, shareholders, business scope, etc.; Unable to participate in investment or establish branches;
4. The reputation of corporate legal persons, shareholders and other executives will be affected. Banks cannot lend money and enterprises cannot bid for projects;
5. If the annual report is overdue or overdue, the legal person of the company must cooperate with the company to submit relevant materials and impose fines.
According to the Regulations on Commercial Registration of Guangdong Province and relevant documents, enterprises that fail to publish their annual reports in two consecutive years since 2015 will be fined 5,000 RMB; A fine of RMB 10,000 shall be imposed on those who fail to publicize the annual report as required for more than three consecutive years (including three years). Individual industrial and commercial households that fail to submit annual reports as required and refuse to make corrections shall be fined between 100 RMB and 1,000RMB.
Contact Us
If you have further inquires, please do not hesitate to contact ATA at anytime, anywhere by simply visiting Tannet’s website www.tannet-group.net, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82148419, or emailing to 2355725085@qq.com.