Tax Advice

Effective tax planning is one of the key aspects that can affect a company’s effective return on investments in China. Your staff should consider the relevant tax regulations and develop an effective tax planning when your company invests and operates in China. bdp can help you to identify these tax risks and provide you practical optimized tax planning ideas.

1. Tax Filing

Foreign investment enterprises (FIEs), representative offices and branches of foreign enterprises in China are required to prepare tax filing. We can assist in the preparation and submission of the tax filing, including the following services:

  • Monthly Value Added Tax (VAT) Filing;
  • Monthly Business Tax (BT) Filing;
  • Monthly Surtaxes (ST) Filing;
  • Monthly Stamp Duty (SD) Filing;
  • Quarterly Corporate Income Tax (CIT) Filing;
  • Annual Corporate Income Tax (CIT) Assessment;
  • Monthly and yearly Individual Income Tax (IIT) Filing (including local staff and expatriate staff).

2. Individual Income Tax (IIT) Planning for Expatriates

  • Provide a tailor-made Individual Income Tax (IIT) planning and recommend a reasonable tax planning for the expatriate;
  • Calculation of Individual Income Tax (IIT), prepare and submit documents, monthly and annual Individual Income Tax (IIT) filing.

3.1 Withholding Tax

For companies based outside of China, but who are supplying services to clients in China (this can include a China-based subsidiary), your invoices are in effect “China-sourced income” and the Chinese tax authorities levy taxes on these income. The following incomes should be subject to China withholding tax (see also current/new DTA and PE rules):

  • Dividends and profits;
  • Interest incomes (e.g.: loan interest paid by Chinese subsidiary on shareholder loans to foreign parent company);
  • Rentals;
  • Royalty incomes;
  • Service fees;
  • Profits from the sale of assets;
  • Other incomes.

3.2 Double Taxation Agreements

China has signed Double Taxation Agreements (DTA) and the Prevention of Tax Evasion with many countries with respect to taxes on income. Of course, we consider the relevant tax agreements and develop an effective tax management strategy for our clients.

Our Services:

  • Advising on withholding tax implication of dividends, interest incomes, royalty incomes, etc. and provide reasonable suggestion under China Tax regulations and Double Taxation Agreements (DTA);
  • We can help you identify areas that might be challenged from the tax authorities and recommend practical solutions;
  • Together with lawyers, we can help you to review shareholder loan contract, service contract and royalty agreement between foreign parent company and Chinese subsidiary;
  • Assisting in the registration and approval of the relevant contracts by authorities;
  • Withholding tax filing in respect of payments to overseas.
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