At MS Advisory we recognize the commercial importance of assurance, and we support our clients and their stakeholders to make informed decisions based on reliable and verifiable information. Our team of audit- and assurance experts supports an array of clients from a broad range of industries to meet Chinese compliance requirements, performs internal audits but also goes beyond regulatory requirements to support with the enhancement of your performance and ensure our clients are well positioned for growth.
Our team has vast experience with Chinese national statutory requirements as well as group reporting packages, group component audits and international reporting standards such as IFRS, IAS and GAAP. In principle our team ensures strict compliance with Chinese national audit regulations, while we provide advice in an international context.
To learn more about the Chinese statutory audit requirements and how we support our clients with these matters, please click the respective links for China Statutory Audit, Annual CIT Filing and the Annual Publication Report.
Our Assurance Services
In cooperation with our licensed MS Advisory audit partner, we assist foreign-invested companies throughout Mainland China and in Hong Kong with the following assurance services:
- Support with the year-end statutory audit in China and Hong Kong.
- Completion of the annual Corporate Income Tax filing.
- Filing and submission of the annual publication report.
- Internal audit, compliance reviews & due diligence – please revert to our Review & Due Diligence Services for more information.
Due to our vast experience in supporting international active clients and because of our international partnerships we are uniquely positioned to support our clients across the scope of their China and international operations.
Together with our qualified China CPA partner and our team of certified accountants and -tax advisors, we support with the conversion of the Chinese annual audit according to group audit requirements, assist with group component audits and perform internal audits in line with international compliance regulations.
Statutory Audit in China
All foreign-invested enterprises in China must complete an annual audit which is performed by a licensed China CPA firm. The purpose of the annual statutory audit is to assess whether the company’s financial statements reflect a true and fair view of the financial position, operating results, and cash flow in all material aspects and in accordance with the Chinese Accounting Standards, or PRC GAAP.
Since the Chinese fiscal year ends by December 31st, the annual audit in China is initiated in the next fiscal year and the audit of the Chinese subsidiary must be completed prior to the annual CIT filing.
Together with our licensed CPA partners we ensure that the annual audit is completed timely and in accordance with Chinese compliance requirements. We provide further guidance to foreign-invested firms to ensure a full understanding of the Chinese audit and its requirements, and support as well with the conversion of the Chinese audit in line with group audit and reporting requirements.
Corporate Credit Report
As of 2020, foreign-invested enterprises in China may be required to obtain a Corporate Credit Report from the People’s Bank of China (PBOC) for completion of their annual statutory audit. As a full stop service provider, MS Advisory has acted as entrusted party to obtain this report for many of our clients and thereby ensure full compliance.
Annual CIT Filing in China
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.
China Publication Report
According to Chinese regulations on publicity of corporate information, all foreign-invested enterprises must submit an annual report to the Chinese Administration for Market Regulation (AMR) together with an annual combinative report to the Ministry of Finance and Commerce (MOFCOM), the State Administration of Taxation (SAT), the State Administration of Foreign Exchange (SAFE) and the National Bureau of Statistics (NBS).
These reports must be submitted prior to June 30th of the subsequent fiscal year and include among others the following information:
- Company’s contact information.
- Information regarding the existence status of the company.
- Information regarding any investment by the company, including establishment of other enterprises or purchase of equity rights.
- Information concerning the company’s registered capital, the amount of paid in capital and contribution methods.
- Any information concerning a change in equity or ownership of the company.
- An overview of essential financial information.
- Information regarding customs activities.
- An overview of intercompany transactions.
We provide our clients administrative relieve by taking charge of the annual publication reporting obligation and submission with relevant in-charge authorities.
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