Page 25 - Doing Business in China

TAXATION

b) Filing and payment

Person Responsible
Type of Return Filing & Payment Deadline
for Filing
Individual Income Tax Withholding agent The withholding agent withholds IIT within 15 days after the end of
(for Comprehensive (i�e� the employer) each month in advance, and the taxpayer must make the annual IIT
Income) filing between 1 March and 30 June of the following year�

Enterprise Income Tax Enterprises and foreign a) Quarterly return and payment—within 15 days after the end of
enterprises with each quarter
establishments in China b) Annual return and payment—within months after the end of
the tax year (together with financial and accounting records)
Withholding Tax Withholding agent Within 15 days after the end of each month

Value Added Tax Taxpayer a) 1,5, 10 or 15 days’ return and payment— within 5 days after
the end of the period, final return and settlement of tax
discrepancies within 15 days after the end of the following
month�
b) 1 month’s or 1 quarter’s return and payment— within 15 days
after the end of the period�
c) Imports—within 15 days after customs issues the tax
payment certificate�
d) Exports—apply for a refund of tax paid on a monthly basis�
Consumption Tax Taxpayer a) 5, 10 or 15 days’ return and payment— within 5 days after the
end of the period, settlement of tax discrepancies within 15
days after the end of the following month�
b) 1 month’s or 1 quarter’s return and payment—within 15 days
from the end of the period�
c) Imports—within 15 days after customs issues the tax
payment certificate�
Customs Duty Taxpayer or agent Within 15 days after the issuance date of the
customs duty payment certificate�

c) Consolidated returns
China generally does not permit the filing of consolidated returns; each company must file a separate return�

d) Statute of limitations
The statute of limitations for assessment and collection is three years if an underpayment of tax is due to the
taxpayer’s inadvertent error in tax computation (e�g� incorrect application of a formula)�

The period is extended to five years if the cumulative amount of underpaid taxes exceeds RMB 100,000�
The statute of limitations period can be up to 10 years for underpayment of enterprise income tax arising
from transfer pricing issues or arrangements without a bona fide business purpose� There is no statute of
limitations for tax evasion��

e) Tax authorities
Tax legislation and policy are jointly developed by the State Taxation Administration (STA) and the Ministry of
Finance, with the STA and its provincial and municipal offices administering tax policies� Each locality in China
has a state tax bureau under the STA and a local tax bureau under both the STA and the local government� The
STA and state tax bureaus are primarily responsible for the collection and administration of taxes that generate
revenue for the central government or revenue that are shared between the central and local governments�

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