Corporate Tax and Accounting in China: Your Complete Guide in 2023

Corporate Tax and Accounting in China: Your Complete Guide in 2022
tax and accounting services in Hong Kong

Last Updated on March 5, 2023 by

Do you have or manage a company, perhaps a joint venture (JV), wholly foreign-owned enterprise (WFOE), or representative office (RO), in China? You might also be working towards opening an offshore company in China. One of the most important things to get right is tax & accounting, but it is pretty complex compared to what you might have been accustomed to back home

Most entrepreneurs find it challenging to get tax matters right, but we have the right solution: using tax and accounting services in China. Here is your comprehensive guide to tax and accounting matters in China. 

What Tax System is Used in China? 

As a corporate entity operating in China, you must adhere to all the accounting and tax obligations. So, let’s start by understanding these obligations: 

  1. Corporate income tax (CIT) in China is set at 25% of the company’s profits. For companies classified under high-end technology status or incorporated in Hainan, Fujian, and Guangdong, CIT is adjusted to 15%. 
  2. Capital gains in China also attract 25% interest rates. Note that losses can be carried forward for five years for standard companies while those in high-end technology have up to ten years. 
  3. China levies a withholding tax of 10% of royalties, interest, and dividends. 
  4. Starting from May 2018, the value of added tax (VAT) in China has been 16% for the importation of products, sales of goods, processing services, and leasing of tangible property.

These are some of the obligations for your company, but the roles are way more than that. For example, you are required to make statutory deductions from staff and submit them to the tax authorities. To understand all your company’s tax and accounting obligations and comply with related policies, the best option is to work with a firm of experts in tax and accounting services in China.

A Note on Miscellaneous Accounting and Tax Matters 

In addition to the above obligations, it is important to note the following considerations on accounting and tax matters. 

  • China has signed close to 100 treaties on double tax avoidance with different countries across the globe. 
  • China is part of major international organizations, including Asia Pacific Economic Cooperation (APEC) and the World Trade Organization (WTO). 
  • China has signed the Closer Economic Partnership Agreement (CEPA) with Hong Kong, which allows some companies and products to access the two markets tax-free.

So, how do these miscellaneous considerations impact your company’s accounting, tax, and compliance with different tax-related policies? If it does some business abroad, especially in states that have signed DTAs with China, the impact can be pretty significant. Working with Fiducia, an expert firm for tax and accounting services in China, can help with the interpretation of the expected impacts. 

Tax and Accounting Services in China Comes with More Benefits

As you can see, China’s tax and accounting services can be pretty complicated. Working with good tax and accounting services in China makes compliance easy, affordable, and convenient. Because you have experts handling accounting and tax matters, it implies that you can concentrate on the core areas of business operations, from marketing to product development.

Experts in tax matters, such as Fiducia, will not stop at helping you with tax matters. In addition, they can help you in crafting strategies for growth, payroll management, and carrying out due diligence. You can also count on them to learn more about the Chinese Accounting Standards (CAS). 

Do not let the complex accounting and tax compliance systems in China hold your company back from achieving its full potential. Let Fiducia hold your hands. They have experts who are willing and capable of handling every tax and accounting matter. Visit their website now to talk to an expert and use their tax and accounting services in China.