(Source: https://pltfrm.com.cn)
Foreign businesses operating in China must comply with a range of tax reporting requirements. These requirements are comprehensive and can be quite complex, reflecting China’s sophisticated tax regulatory framework. As of my last update in April 2023, here are the key tax reporting requirements for foreign businesses operating in China:
- Corporate Income Tax (CIT) Reporting: Foreign businesses are required to file CIT returns annually. This involves declaring their taxable income, tax deductions, and exemptions. The annual CIT return is usually due by May 31st of the following year. In addition to annual returns, quarterly or monthly provisional CIT filings may be required.
- Value-Added Tax (VAT) Reporting: Businesses registered for VAT must file periodic VAT returns. The frequency of these returns (monthly or quarterly) depends on the size of the business and the amount of VAT payable. The returns include details of sales, output VAT, input VAT, and VAT payable or refundable.
- Withholding Tax Reporting: For payments to non-residents, such as dividends, interest, royalties, and service fees, foreign businesses are required to withhold tax at source and report these withholdings to the tax authorities.
- Transaction Reporting: Certain transactions, especially those involving related parties or international transactions, may require specific reporting. This includes transfer pricing documentation and reporting, which is crucial for transactions between the foreign business and its overseas affiliates.
- Stamp Duty Reporting: Businesses must pay stamp duty on certain documents, including contracts, property lease agreements, and books of account. The requirement for stamp duty reporting depends on the nature and value of the documents.
- Social Security and Housing Fund Contributions: Employers are required to withhold and contribute to social security and housing fund contributions for their employees. These contributions must be reported and paid to the relevant authorities.
- Foreign Contractor Tax: Foreign businesses engaged in engineering, construction, and installation projects in China have specific tax reporting obligations under the Foreign Contractor Tax regime.
- Annual Reporting to the Administration for Market Regulation (AMR): Foreign-invested enterprises in China are required to submit an annual report to the AMR, detailing their business operations and financial status.
- Foreign Exchange Reporting: Transactions involving foreign exchange are subject to reporting requirements to China’s State Administration of Foreign Exchange (SAFE).
- Other Specialized Reporting: Depending on the industry and type of operation, there may be additional reporting requirements, such as environmental taxes, customs duties, and real estate taxes.
It’s important to note that tax laws and regulations in China can change frequently, and local practices can vary. Thus, foreign businesses are advised to seek up-to-date advice from tax professionals familiar with Chinese tax law and regulations to ensure compliance. Non-compliance can result in penalties, including fines and interest on unpaid taxes.
PLTFRM is an international brand consulting agency that works with companies such as Red, Tiktok, Tmall, Baidu, and other well-known Chinese internet e-commerce platforms. We have been working with Chile Cherries for many years, reaching Chinese consumers in depth through different platforms and realizing that Chile Cherries exports in China account for 97% of the total exports in Asia. Contact us and we will help you find the best China e-commerce platform for you. Search pltfrm for a free consultation!
