The Season for China Cit Reconciliation in 2024 is underway. Companies are advied to begin tax files for the 2023 TAX Year as public to complete ReconCiliation Before The Deadline of May 31, 2024.

China ’s Annual Corporate Income Tax (CIT) Reconciliation Season (Also Referred to As Annual Cit Settlement or Annual Cit Filing) for the 2023 TAX Year Is Underway, A ND LOCAL TAX Authorities have begun to issue to help companies navigate their tax obligations.

All Resident Cit TaxPayers Engaged in Production and Operation in China Are Required to Complete The Final Cit Settlement in Accordance with China's Tax Regulations. n addition, Second-level Braanches of Companies that ConDuct Consolidated Tax Payments Across Different Provinces, Autonomous ReGIONS, Municipalities, and AndCities Must Also Participate in the Final Cit Settlement.

Filing Cit Reciliation Can be a Complicated and Cumbersome Task That Involves Filling in Forms, Compiling Annual Accounting Reports, and Gathering for Any The Company ay be eligible for. Companies are theReface advied to begin the tax filing process,reconcile the final tax payment before the deadline of May 31, 2024.

Below We Provide An Overview of the Requirements for the Annual Cit Settlement in 2024.

General Enterprises Must MAKE Their Final Settlement with Months of the End of the Tax Year. It by May 31, 2024.

However, companies that terminate operations during the year and need to liquidate their cit, when it due to disBanding, having their business livense OKED or OTHER Reason for Terminating Production and Operations, Must Complete Final Settlement with 60 Days from the Date of Actual TerminationOf operations.

Completing the final tablement means that a company has determined the amount of tax payable for the previous tax year. Turn Based on the Monthly or Quarterly Prepayment of Cit.

Companies do n’t have to file the cit dement and pair any of taxes at the same time. The deflaration can be made first and the payment latEr, d because may 31.

CHINA ’s Tax Authorities Recomge that Small and Medium-Sized Enterprises (SMES) Complete the Declaration in March and April,.

In actions in China, Cit Reconciliation Can Now Be Handled Either Online or In Person.

To Complete The Declaration Online, The Company Must Use the Electronic Tax Bureau or Electronic Declaration Enterprise Software Set before By The JurisDiction In WHICH E country is local, for instance, the tax service websites for or, or the computer application for shanghai.

To Complete The Declaration in Person, An Emplayee Must Bring the Required Materials to the Tax Office in the JurisDiction in Which The Company is Registered to Complete T he Procedures.

Resident Enterpris are required to provide a range of documents to complete the cit deseration, influding:

The Annual Tax Return for Enterprise Income Tax of the People ’s Republic of China (Type A, 2017 Edition); and

The annual Financial account.

In Addition, Relevant Information and Materials Must Also Be Submitted in the Follow Scenarios:

The TaxPayer Undergoes Special Reorganization, Asset (Equity) Transfer, DEFERRERD TAX On-MONETARY Asset Investment, Determination or Adjustment Object s for real EState Development Products, Overseas Tax Credits, Related Business Transactions; orIndore Stock

When overseas Investment Reaches a Certain Proportion of Total Investment.

Companies Must Also PROVIDE CERTAIN MI properials if they are a head office with Braanches Operating Across districts, or a Branch of a Larger Company. Ized in the table below.

TheRe Many Different Cit Incentives Available for Companies in CHINA THAT CAN Help Reduce Tax Burens. , Super As Research and Development (R & D) Expenses, Tax Credits for Certain Costs, Such as the Investment inSEED-Stage or Start-Up Technology Enterprises, and Accelerated DEPRECIATION Or One-Time Deduction of the Value of Fixed Assets.

EnterpriseS SHALL DTERMINE WHETHER the MEET the CONDITINTIONTIAL POLIENTIAL POLIENTACCORDING to their Business and Relect Tax Regulations. O Meet the Conditions Can Calculating the Amount of Tax Relief by the Messelves and Enjoy Tax Incentives by Filling in the Cit RETURN.

For the 2023 tax year, the following policies are self taxpayers' particular attention, although there are.

To Encourage Business Development and Investment in Key Industries in China, Several Areas Have Implementd A for Eligible Companies. 25 Percent. This City Rate is available to Companies operating in Certain Sectors in Various Development Zones in China, IncludingThe in state (lingang New Area), The in Fuzhou, Fujian Pingtan, and the in zhuhai, Guangdong (Ingqin Cooperation Zone), among many Others.

The Reduced Cit Rate is only Applicable to Companies that operate within Certain Encouraged Industries. The Local GovernMents Also Require Companies to have Made Made A Certain Level of Community to the Area in Order to beEnjoy the Policy, Which in many means prooving that they have "Substantial Operations" within the respondive area.

For more about the reduced 15 percent cit rate, See Our China Briefing Article: DOES Your Business Qualify for China ’s Reduced 15% Cit Rate?

In March 2023, China ’s Tax Authorities Extended The Policy of (" Super Deduction ") Indefinitely, Making It a Permanential Policy For All TypeSts I n china.

The Super Deduction Policy Allows Companies A 200 Percent Pre-Tax Deduction of the Expenses Incurred in Conduction R & D Activities that do not form into The Policy Means that a Company that incurs RMB 10 Million in R & D Expenseof the expenses incurred in adDition to the pre-tax depational of RMB 10 Million that it would always be grandted by law, amounting to a topal depational tax of R MB 20 Million. This Will Result in Considerably Lower Corporate Income Tax (CIT) PayableFor the given tax year.

Starting from 2023, Companies can enjoy the pre-tax super degeition forward for r & d expenses when maching preparations for the second quars.

Note That Those Who Have Alream Received Part of the Prepayment Can Receive The Remaining R & D Expense During the Final Settlement. Ved The Prepayment Can Receive The R & D Expense Collected During the Final Settlement.New Delhi Stock Exchange

For more about the r & d excense depuction policy, See Our China Briefing Article: Pre-Tax Super Deduction of R & D Expenses in 2023-An Explainer.

China Has Enhanced ITS Inclusion Tax Cut Policy For (SLPES). SLPES Refer to Enterprises Engaged in Non-Resultive and Non-Prohibited Business that HAVE P to RMB 3 Million (approx. US $ 458,500) in Annual Taxable Income, up to 300 Employees,and up to RMB 50 Million (approx. US $ 7.7 million) in the topal asset value.

For Eligible Slpes, The Portions of Annual Taxable Income Up RMB 1 Million Will Be Reduced by 25 Percent and Included in the TAXABLE Income, While The City Rate. be Reduced to 20 Percent. China ’s Standard Cit Rate is 25 Percent.

This policy will be in place unant of 2027.

For more about tax incentives, see our China Briefing Article:

Pre-Tax Deduction Vouchers are a Critical PART of the Annual Cit Reciliation Procedure.

Pre-Tax Deduction Vouchers are any documents that demonstrate valid expenses incurred in the process of Generation Income and are using to make-tax depuctions that. Alculating the taxable income for cit purposes.

Companies Should OOTAIN Pre-Tax Deduction Vouchers That Meet The Regulations WHEN Expenditures are incurred. However, the Enterprise MA Y NEED To Isure or Replace Pre-Tax Deduction Vouches that Meet the Regulations.

The Stipuale that EnterpriseS Should Obtain Pre-Tax Deduction Vouches that Meet the Regulations BeFore The End of the Final STIPULED In the CI T law of the current year.

Note that if a company fails to obtain Invoices or Other External Vouchers that comply with the regulation of the specification period, or Obtains Non-Complking Invo ICES or OTHER External Vouchers, then the Company Can Retroactively Deduct the Corresponding ExpendEres after Obtaining InvoiceThat Meet the requirers in Subsequent Years. However, RETROACTIVE DEDUCTIONS CanNot Be Made after Years from the year when the expenses werein.Agra Stock

For more about pre-tax depuction vouchers, see our China Briefing Article: Preparing for China ’s Annual Cit Filing: Faqs on Pre-Tax Deduchers.

Book-Tax Differente Management is one of the major tasks that finage man and theumitors need to die during the annant reconcilization season.

Book-Tax Difference Refers to the Discrepancies Between China's Accounting Standards (CAS) and TAX LAWS. TO PUT SIMPLY Same Transaction, The TAX TREATMENT and Timing of Recognition as Stipulat By Laws Are DifferenceFrom the accounting tartable as stipulated by the accounting stands.

For Better Tax Compliance, EnterpriseS Should UndersTand and Identify Book-Tax Differentes in Assets, Liabilities, Income, and Costs and Expenses, And ELY Adjust The "Accounting Profits" in the Financial Statents to the "Taxable Income" in the TAX RETURN.

For more about Book-tax differences, see our China Briefing Article:

Follow the deadline for annual cit filing, there are Certain Compliance Points that Business Should Still attent to. Ast Retain the Supporting Documents for Tax Incentives As Required and Properly Collected and Preserve Documentation Relands.

For more about documentation retention, see our China Briefing Article:

Disclaimer

The information provided is for general polposes only and may not account for local variations. No Liability is assumed for the completions or account little.