Administrative Measures for Enterprise Income Tax Annual Filing and Settlement

企业所得税汇算清缴管理办法 (中文)

Guoshuifa [2009] No.79 — Issued by the State Taxation Administration on April 16, 2009. Effective from January 1, 2009. Status: amended.

Sources:

• Chinese text: 江苏省税务局 (Jiangsu Provincial Tax Service)

All information in this document is authentic in Chinese. English is provided for reference only. In case of any discrepancy, the Chinese version shall prevail.

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Article 1

These Measures are formulated in accordance with the Enterprise Income Tax Law and its Implementation Regulations (hereinafter "EIT Law and its Implementation Regulations") and the Tax Collection and Administration Law and its Implementation Rules, for the purpose of strengthening EIT collection and further standardizing the administration of annual filing and settlement (汇算清缴).

Article 2

Annual filing and settlement of EIT refers to the act whereby a taxpayer, within 5 months from the end of the tax year or within 60 days from the actual date of cessation of operations, independently calculates the taxable income and tax payable for the tax year, determines the amount to be supplemented or refunded based on monthly or quarterly prepaid EIT amounts, completes and submits the annual EIT return, provides required materials to the competent tax authority, and settles the full year's EIT liability.

Article 3

All taxpayers engaged in production or business operations during the tax year (including trial production and trial operations), or who cease operations during the year, regardless of whether they are in a tax reduction/exemption period, and regardless of whether they are profitable or in a loss position, shall carry out annual filing and settlement.

Taxpayers subject to assessed fixed-amount (核定定额) collection of EIT are not required to carry out annual filing and settlement.

Article 4

Taxpayers shall carry out annual filing and settlement within 5 months from the end of the tax year and settle all EIT payable or refundable.

Where a taxpayer experiences dissolution, bankruptcy, cancellation, or other termination during the year requiring EIT liquidation, it shall report to the competent tax authority before liquidation and carry out annual filing within 60 days from the actual date of cessation of operations.

Article 5

The prepayment EIT return for December or the fourth quarter shall be completed within 15 days after the end of the tax year. After the prepayment filing, the taxpayer shall proceed with annual filing and settlement for that year.

Article 6

Where a taxpayer has matters requiring tax authority approval, review, or filing, such matters shall be handled in a timely manner before the annual EIT filing, per the relevant procedures, deadlines, and requirements.

Article 7

Taxpayers shall correctly calculate taxable income and tax payable, truthfully and correctly fill in the annual EIT return and its schedules, submit related materials completely and in a timely manner, and bear legal responsibility for the truthfulness, accuracy, and completeness of the filing.

Article 8

When handling annual EIT filing, taxpayers shall truthfully submit:

1. Annual EIT return and its schedules;
2. Financial statements;
3. Materials for filing matters;
4. Basic information of the head office and branch offices, tax collection method for branches, and prepayment status;
5. Where an intermediary agency files on behalf of the taxpayer: the agency contract and a report containing tax adjustment items, reasons, basis, calculation process, and adjusted amounts;
6. Where related-party transactions are involved: the Annual Report on Related-Party Transactions of PRC Enterprises;
7. Other materials required by the tax authority.

Where the taxpayer files electronically, it shall retain related materials or submit paper copies as required.

Article 9

Where a taxpayer is unable to handle annual filing within the prescribed period due to force majeure, it shall apply for an extension of the filing deadline per the Tax Collection and Administration Law.

Article 10

Where a taxpayer discovers an error in the current year's filing during the annual filing and settlement period, it may re-file the annual EIT return within the filing period.

Article 11

Where the prepaid EIT is less than the tax payable, the difference shall be settled within the annual filing period. Where the prepaid amount exceeds the tax payable, the tax authority shall promptly handle the refund, or, with the taxpayer's consent, credit it against the following year's EIT.

Article 12

Where a taxpayer has special difficulties and cannot supplement the EIT payment within the annual filing period, it shall apply for an extension of tax payment per the Tax Collection and Administration Law.

Article 13

For taxpayers conducting cross-regional operations with consolidated tax payment, the head office that performs unified calculation shall handle the annual filing with the tax authority at its location. Branch offices do not carry out annual filing, but shall report business revenue and expenditure information to the tax authority at their location before the head office performs filing.

Article 14

For enterprise groups approved to pay EIT on a consolidated basis, the parent company (the "consolidating enterprise") shall submit the consolidated annual return covering all member enterprises, together with each member enterprise's individual annual return, to the tax authority at the consolidating enterprise's location.

The consolidating enterprise shall determine the deadline for member enterprises to submit materials. Materials submitted by member enterprises shall be reviewed by the tax authority at their respective locations.

Article 15

Where a taxpayer fails to carry out annual filing within the prescribed period or fails to submit the materials specified in Article 8, it shall be dealt with per the Tax Collection and Administration Law.

Article 16

Tax authorities at all levels shall make unified arrangements for annual filing and settlement work. The department responsible for day-to-day EIT administration shall organize and implement the work. Internal departments shall fully coordinate and cooperate.

Article 17

Tax authorities shall proactively provide tax services before and during the annual filing period:

1. Adopt various publicity forms to help taxpayers understand EIT policies;
2. Actively carry out filing guidance to help taxpayers understand the scope, timeline, and required materials;
3. When necessary, organize taxpayer training sessions.

Article 18

The competent tax authority shall issue forms, certificates, and documents relating to annual filing in a timely manner.

Article 19

When receiving a taxpayer's annual return and materials, if the tax authority discovers incomplete submissions, it shall promptly notify the enterprise to supplement or correct within the filing period.

Article 20

After receiving a taxpayer's annual return, the tax authority shall review the logic and completeness. Key review areas include:

1. Whether figures in the annual return correspond with financial statements and whether calculations are correct;
2. Whether the taxpayer has made up prior-year losses and carried forward losses correctly;
3. Whether the taxpayer meets tax preference conditions and whether applications follow prescribed procedures;
4. Whether property losses deducted before tax are genuine and comply with procedures;
5. Whether the taxpayer possesses tax payment certificates for prepaid EIT and whether prepaid amounts are accurate;
6. Whether data between EIT and other tax categories is consistent and logically coherent.

Article 21

The tax authority shall conduct a preliminary review and then promptly handle supplementary payments, refunds, or credits against the following year's EIT.

Article 22

Tax authorities shall coordinate the administration for cross-regional and consolidated taxpaying enterprises:

1. Where the head office's tax authority discovers questionable items in branch filing materials, it shall issue an inquiry letter to the branch's tax authority, which shall investigate and reply within the required timeframe;
2. Upon receiving verification results, the head office's tax authority shall make corresponding adjustments to reported taxable income and tax payable.

Article 23

After annual filing is completed, the tax authority shall organize data analysis, tax assessment, and inspections per STA provisions.

Article 24

Tax authorities at all levels shall prepare written summary reports. Provincial-level tax bureaus shall submit summary reports and annual EIT consolidated statistical returns to the STA (Income Tax Department) before the end of July each year. Reports shall include:

1. Basic status of annual filing work;
2. Distribution of EIT revenue sources;
3. Changes in EIT revenue and reasons;
4. Problems and suggestions for improving EIT policies and administration.

Article 25

These Measures apply to EIT resident enterprise taxpayers.

Article 26

Provincial-level tax bureaus may formulate specific implementation measures based on these Measures.

Article 27

These Measures take effect from January 1, 2009. The following are simultaneously repealed: Guoshuifa [2005] No.200, Guoshuifa [2003] No.12, and Guoshuifa [2003] No.13.

Annual filing for the 2008 tax year shall be carried out per these Measures.

Article 28

These Measures shall be interpreted by the State Taxation Administration.