Annual CIT Filing

In China, Corporate Income Tax (CIT) is paid on a monthly- or quarterly preliminary basis in accordance with the company’s accounting records. However, due to discrepancies between the Chinese accounting standards and China’s tax legislation, the actual amount of taxable income for CIT purposes may differ from the company’s accounting records. As such, in accordance with Chinese legislation, all companies must submit an annual CIT reconciliation filing to determine whether all tax liabilities have been met and subsequently must either make a supplementary tax payment or apply for tax reimbursement.

The annual CIT filing must be completed by May 31st of the next fiscal year. Foreign-invested enterprises that engage in frequent transactions with related parties should additionally prepare an annual affiliated transaction report on transfer pricing issues supplementary to the annual CIT filing. In certain regions of China, foreign-invested enterprises may as well be required to prepare a separate CIT audit report performed by a China Certified Tax Agent.

We assist our clients to navigate the Chinese taxation environment and support with the development of an understanding as to the differences between Chinese tax law and the Chinese accounting standards. We support as well with the calculation of CIT taxable income and filing of the annual CIT declaration.