In Mainland China, tax compliance is crucial for both businesses and individuals. Among the various tax filings, quarterly and annual CIT filings, monthly VAT filings, and monthly or annual IIT filings are particularly important. Late filing or non-compliance with filing requirements can lead to penalties and fines.

Quarterly and Annual CIT Filings

Quarterly CIT filings involve reporting the taxable income and computing the CIT liability for the preceding quarter. Annual CIT filings, on the other hand, summarize the entire year's income and deductions and calculate the final tax liability. These filings are mandatory for all companies operating in China, including foreign and domestic companies.

Monthly VAT Filings

Monthly VAT filings require businesses to report their taxable sales and purchases for the previous month. The calculation of VAT payable is based on the difference between sales and purchases. VAT is one of the major sources of revenue for the Chinese government. Monthly VAT filings ensure that businesses are paying their taxes regularly.

Monthly or Annual IIT Filings

For individuals, IIT filings involve reporting their taxable income and computing the IIT liability for the relevant period. Taxable income is categorized into 9 categories and each income category has its own tax rate(s) and allowable deductions. For residents, some income categories are combined as “comprehensive income” for tax calculation on an annual basis while the rest is taxed separately by category on a monthly basis. For non-residents, each income category is taxed separately on a monthly basis.

Our Tax Services

As tax consultants, we provide comprehensive services to assist businesses and individuals in China. Apart from tax filings and compliance, we also provide professional tax advices, for example:

Ø CIT Advices: Based on our in-depth understanding and analysis of a company's current CIT situation, we can advise on the potential benefits of partially adjusting the operation model to qualify for relevant tax incentives. For instance, we can guide companies through the process of obtaining High-and-New Technology Enterprise status, which entitles them to a reduced CIT rate of 15% (compared to the standard CIT rate of 25%).

Ø IIT Planning: We analyze individuals' investment portfolios, transaction activities and overall financial situation to advise on the most effective IIT planning strategies. Our goal is to ensure that our clients' IIT efficiency is maximized while complying with all relevant tax regulations.