China company annual return filing is required for every company registered in China, which is basic maintenance. So it is quite necessary for you to have a general idea on this issue in advance. Annual filing refers to the yearly statement which gives essential information about a firm's composition, activities, and financial position, and which must be filed by every active incorporated or registered firm with an appropriate authority.
1. Annual Audit Report
Generally, you should prepare an annual audit report in January, right after the company has closed the previous year’s accounts. The audit procedure takes about two months, and the audit report should be completed before the end of April in order to meet the May 31 tax reconciliation deadline.
2. Corporate Income Tax Reconciliation
In China, corporate income tax (CIT) is paid on a monthly or quarterly basis in accordance with the figures shown in the accounting books of the company; companies are required to file CIT returns within 15 days from the end of the month or quarter. As such, the State Administration of Taxation (SAT) requires companies to submit an Annual CIT Reconciliation Report within five months from the previous year’s year-end to determine if all tax liabilities have been met, and whether the company needs to pay supplementary tax, or apply for a tax reimbursement. Generally, the Annual CIT Reconciliation Report must include adjustment sheets to bridge the discrepancies between tax laws and accounting standards.
3. Annual Inspection
Foreign Invested Enterprises (FIEs) in China are required to undergo an annual cooperative inspection jointly conducted by several governmental departments of the State Council each year from March to the end of June. These inspections are designed to ensure that FIEs conducting businesses in China are fulfilling the legal commitments they make to each of the departments.
The relevant documents required for the annual inspection are:
• Annual inspection report;
• Audit report issued by external accounting firm;
• Financial statements of the previous year;
• Certificate of approval for FIEs;
• Business license;
• Capital verification report;
• Industry-specific license or permit;
• Other forms or documentation required by relevant government departments.
4. Annual Foreign Currency Inspection
FIEs that conduct frequent transactions with others in foreign currency should prepare an Annual Foreign Currency Inspection Report as well.
5. Profit Repatriation
Companies distributing profits should complete the reconciliation procedure in advance to leave sufficient time for shareholder companies to prepare for CIT compliance before the May 31 deadline. The submission of additional documents may also be required.
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