Annual Audit Assistance

Individual Income Tax

Individual Income Tax ("IIT") is one of the most complicated tax structures in China due to unclear and rapid changes of rules. Some tax-efficient items can be taken advantage of if employment contracts are carefully structured. However, there are also a number of pitfalls, such as the 183- or 90-day rule, deductible items, overseas income, nominal salary, etc., of which violations may result in severe penalties or even imprisonment.

Given that IIT accounts for a larger and larger percentage of Chinese fiscal revenue, tax authorities are strengthening the administration of IIT, cracking down on any under-paid activities via continuously promulgated regulations.

IIT is generally withheld by employers on behalf of employees. If an employer fails to withhold IIT for its employees or does not pay IIT after withholding IIT, the employer is subject to a fine ranging from 50% to 300% for the underpaid IIT.

We can provide you the following IIT services to ensure you get into the right place at the right time, and/or take suitable corrective actions to avoid severe penalties or imprisonment:

- Propose suggestive recommendations from the moment you start your business in China

- Calculate IIT on a monthly basis

- Perform tax filing

- Calculate overdue IIT, late interest penalty, and potential fines

- Propose IIT back pay strategy

- Handle IIT return for employer

Corporate Income Tax

There are lots of different treatments between the prevailing accounting system and tax system in China . The objective of the accounting system is to present financial statements on a true and fair basis, while the tax system represents state sovereignty. Many foreign investors are confused and put off by the differences between the two systems.

Chinese tax authorities require all Foreign Invested Enterprises ("FIEs") perform a tax reconciliation by the end of May each year. By tax reconciliation, tax authorities require additional payment for under-paid Corporate Income Tax ("CIT") or refund over-paid CIT during the prior year.

Based on our statutory financial statement audit or tax audit, we can propose relevant tax adjustments, prepare complicated tax filing documents, and do tax filing for you on a timely, accurate and legal basis.