How and when does our Chinese company have to do an annual filing?

Generally, companies established and registered in China (LLC) have the following annual filing obligations:

1. Financial statements filing

Companies established and registered in China are required to file the annual financial statements (no audit required) to the local Administration for Industry and Commerce through the online filing system within 6 months after the end of each calendar year.

2. Tax filings

There are mainly the following three types of taxes to be filed with the Chinese tax authorities:

1)   Corporate Income Tax (CIT)

Tax resident enterprises (TREs) are subject to corporate income tax (CIT) on their worldwide income. For the sake of completeness, it shall be noted that a non-TRE that has no establishment or place in China is taxed only on its China-source income. A non-TRE with an establishment or place in China shall pay CIT on income derived by such establishment or place from sources in China as well as income derived from outside China that effectively is connected with such establishment or place.

Under the CIT law, the standard tax rate is 25%.

The tax year commences on 1 January and ends on 31 December. Enterprises are required to file and pay provisional income taxes on a monthly or quarterly basis within 15 days following the end of each month/quarter, and file and settle their annual income tax return within five months after the end of the tax year through the online filing system. Information on related-party transactions must be filed with the annual income tax return.

2)   Value-Added Tax (VAT) and VAT surcharges

VAT is generally filed and paid on a monthly basis through the online filing system. The VAT surcharges, which include urban construction tax, education surcharges, and local education surcharges are calculated based on the paid VAT and are filed with the VAT declaration.

3)   Individual Income Tax (IIT)

Companies established and registered in China are required to withhold and file the IIT of their employees on a monthly basis within 15 days after the end of each month through the online filing system.

Provided by PwC