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Circular of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Final Accounting and Settlement of Non-resident Enterprise Income Tax
Promulgation Date:2009-01-22  Promulgation Number:Circular of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Final Accounting and Settlement of Non-resident Enterprise Income Tax Guo Shui Fa [2009] No. 6  Promulgation Department:State Administration of Taxation

Circular of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Final Accounting and Settlement of Non-resident Enterprise Income Tax

Guo Shui Fa [2009] No. 6

State tax bureaus of provinces, autonomous regions, municipalities directly under the Central Government and separately planning cities, and local tax bureaus of Guangdong Province and Shenzhen City,

In order to implement the Enterprise Income Tax Law of the People's Republic of China and its implementing regulations, regulate the final accounting and settlement activities of non-resident enterprise income tax, the State Administration of Taxation has formulated the Administrative Measures for Accounting and Final Settlement of Non-resident Enterprise Income Tax, which is hereby printed and distributed to you for your implementation. In case of any problems during the implementation, please give timely feedback to the State Administration of Taxation (Department of International Taxation).

Attachments:

1. Notice on Tax-related Issues of Accounting and Final Settlement of Non-resident Enterprise Income Tax (applicable to the enterprises making declarations according to facts) (omitted)

2. Notice on Tax-related Issues of Accounting and Final Settlement of Non-resident Enterprise Income Tax (applicable to the enterprises taxed on assessment basis) (omitted)

3. Certification of Summarized Return of Income Tax of Non-resident Enterprise (omitted)

4. Notice on Assessment of Payable Tax of Non-resident Enterprises (omitted)

State Administration of Taxation
January 22, 2009

 

Administrative Measures for Accounting and Final Settlement of
Non-resident Enterprise Income Tax

 

The present Measures is formulated in accordance with the relevant provisions of the Enterprise Income Tax Law of the People’s Republic of China (hereinafter referred to as the Enterprise Income Tax Law) and its implementing regulations as well as the Law of the People’s Republic of China on Administration of Tax Collection (hereinafter referred to as the Law on the Administration of Tax Collection) and its detailed implementing rules to regulate the accounting and final settlement of income tax of non-resident enterprises.

I. Objects of accounting and final settlement

(I) The non-resident enterprises (hereinafter referred to as the Enterprises) established according to laws of foreign countries or regions and the actual management authorities are not in inside China but with institutions or offices established in the territory of China, regardless of profits or losses, shall participate in the accounting and final settlement of income tax in accordance with the provisions of the enterprise income tax law and these Measures.

(II) In any of the following circumstances, the enterprises are not required to participate in accounting and final settlement of the income tax of the year:

1. where the enterprises provisionally with contracted projects and provision of service in China for less than one year, which terminate their operating activities in the middle of the year and have settled taxes;

2. Where the enterprises have cancelled their registration in the period of final settlement; or

3. Otherwise approved by the competent tax authority not to participate in the final settlement of income tax of the year.

II. Time limit of accounting and final settlement

(I) The enterprises shall submit the annual return on payment of enterprises income tax to the tax authorities within five months of the end of the year, implement accounting and final settlement and settle the payable and refundable taxes.

(II) In case of termination of operating activities in the middle of the year, the enterprises shall handle the accounting and final settlement of enterprises income tax of the period in question to the tax authorities within 60 days of the actual termination of operation.

III. Declaration of tax payment

(I) The enterprises shall, according to the facts, fill in and submit the following statements and materials when handling the annual declaration of enterprise income tax:

1. Return of tax payment and attached tables for annual enterprise income tax;

2. Annual financial and accounting reports; and

3. Other related materials that should be submitted as specified by the tax authority.

(II) The enterprises shall make applications for delayed declaration to the competent tax authorities within five months of the end of the year in case of failure to handle the declaration of annual income tax within the prescribed time limit due to special reasons. The declaration time limit may be appropriately extended upon approval of the competent tax authorities.

(III) The enterprises shall submit paper-based return of tax payment if they handle the declaration for tax payment electronically.

(IV) The enterprises shall attach the power of attorney signed by the principal in case of entrusting an agency to handle the declaration for payment of annual enterprise income tax.

(V) The enterprises which need to make up for or refund the income tax after declaration for annual income tax and upon review and verification by competent tax authorities shall make up for the tax to the treasury in the prescribed time limit or handle the refund procedures in accordance with the requirements of tax authorities after they receive the Notice on Tax-related Issues of Accounting and Final Settlement of Non-resident Enterprise Income Tax (see attachments 1 and 2).

(VI) For an enterprise which adopts summarized declaration of income tax upon approval, its institution or office of the (hereinafter referred to as the final settlement institution) the performs summarized tax payment shall, before May 31 each year, request the “Certification of Summarized Return of Income Tax of Non-resident Enterprise” (hereinafter referred to as the Certification of Summarized Return of Income Tax, see attachment 3) from the local tax authority in issue; and other institutions and offices (hereinafter referred to as other institutions) of the enterprise shall, before June 30 each year, submit the Certification of Summarized Return of Income Tax and their financial and accounting reports to their local competent tax authorities.

In the prescribed time limit, if other institutions agencies fail to submit the Certification of Summarized Return of Income Tax to their local competent tax authorities without approvals for delayed declaration of the final settlement institution, the competent tax authorities of other institutions shall take charge of examining and verifying or checking the amount of payable tax of other institutions, calculate and collect the tax that should be made up for and implement the punishment thereof.

(VII) The enterprises which should delay payment of make-up taxes due to actual difficulties are subject to the relevant provisions of the Law of Administration of Tax Collection and its implementing rules.

(VIII) In case of any error found in the declaration of the annual income tax during the time limit of final settlement of income tax, the enterprise shall re-handle the declaration of annual income tax with the competent tax authorities within five months of the date of end of the year.

(IX) If the last day of the prescribed time limit for an enterprise to submit its statements is a statutory holiday, the next day of such holiday shall be the last day of the prescribed time limit; if there are three statutory holidays or more within the prescribed time limit, the last day of the prescribed time limit shall be extended accordingly.

IV. Legal liabilities

(I) If an enterprise fails to handle its declaration of annual income tax within the prescribed time limit and no approval has been given by the tax authority for delayed declaration or the materials submitted are incomplete or not satisfactory, it shall make up for the declaration within the prescribed time limit after receipt of the Notice on Correction within Prescribed Term issued by the competent tax authority.

If an enterprise fails to handle its declaration of annual income tax within the prescribed time limit and no approval has been given by the tax authority for delayed declaration, the competent tax authority may, besides order for correction within the prescribe time limit, impose a fine no more than RMB 2000 yuan in accordance with the provisions of the Law of Administration of Tax Collection; and in case of failure of declaration beyond the prescribed time limit, a fine from RMB 2000 yuan to RMB 10000 yuan may be imposed, and assessment shall be made on its annual amount of payable tax and an order shall be made for its payment of such tax within the prescribed time limit. The enterprise shall pay tax within the prescribed time limit after receipt of the Notice on Assessment of Payable Tax of Non-resident Enterprises (see attachment 4) issued by the competent tax authority.

(II) For the enterprise that fails to handle the final settlement of income tax within the prescribed time limit, besides order for it to do so within the prescribed time limit, the competent tax authority shall surcharge overdue payment for the overdue payment of tax according to the provisions of Law of Administration of Tax Collection.

(III) The dispute on tax payment between the enterprise and the tax authority shall be settled according to the relevant provisions of the Law of Administration of Tax Collection.

V. The Measures shall enter into force on January 1, 2008.

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