China Accounting Standards & Tax Compliance in China
China Accounting Basic Concepts
China Accounting, Bookkeeping, Financial Statements and Tax Compliance Services
Get a Better Understanding of China Accounting Standards
Since there is a great difference between the accounting standards in China and the West, businesses that are looking to establish themselves in China will need to be aware of these major differences to maximize the tax efficiency of their respective WFOE formations.
China Accounting Standards (CAS)
The International Financial Reporting Standards (IFRS) are the standards that are more commonly applied by western countries. This is to apply a single standard or global language for international business accounting so that financial reporting is understandable across different countries, and is also easily understandable.
Since all foreign companies that move to establish a WFOE in China will be required to comply with the Chinese Generally Accepted Accounting Principles (GAAP), also called “China GAAP,” “PRC GAAP” or China Accounting Standards (CAS), China Accounting Services such as those provided by Business China can help foreign companies adhere to Chinese rules of business, and can also help prevent foreign companies that are operating in China from breaking any local laws.
This is the main reason why the professional accounting services offered by Business China is an indispensable asset to any foreign business that has set up a WFOE in China.
China Accounting Standards (CAS) vs. IFRS
The following are some of the salient features of the CAS and the IFRS.
- The first difference is that the China accounting year starts from January 1st and ends December 31st.
- The base and record currency of bookkeeping and financial statements is RMB (Renminbi).
- Charts of accounts must abide by” accounting system for business enterprises” in China.
- Chinese is the sole officially recognized language for financial reporting and bookkeeping.
- China accounting software must meet the local market standards.
- All invoices for bookkeeping must be the official and authentic invoice (“Fapiao” in Chinese).
- Corporate income tax and turnover tax filing should report monthly.
Business China takes care of all your accounting obligations and provides quick access of experienced accountants to ensure that your WFOE is operating within Chinese rules. To achieve this, we have a secure network of online teams and local teams for the management of your entire accounting needs, and to ensure you remain compliant with China accounting laws and policies. Before we get down to China accounting total support services in detail, let’s go through some basic concepts that are related to accounting in China.
China Tax Registration Certificate
China Tax Registration Certificate is a legal document which is issued by the Chinese authorities. The certificate bears the China company’s legitimate name, company type, registered address, authorized representative’s name, registered capital, establishment date, the business term, business scope and China tax identification number.
China Tax Identification Number (TINs)
The China tax identification number is similar to an ID number of a citizen, it is unique and inalterable. China already combines business license with the tax registration certificate into one Business License, and has also introduced a unified social credit code to be consistent with the tax identification number.
China Company Taxpayers Registration
While the China tax registration certificate is combined with the business license, it does not indicate the company taxpayer registration. A business that has set up a WFOE in China is requested to apply for the company taxpayer registration, within 30 days from the issuance of the business license.
Those foreign companies that are looking to set up a WFOE in China will need the following documentation.
- Taxpayer Registration Form
- Passport / ID of Legal Representative
- Other Required documents based on different office address;
- Company Business License
- Article of Association
- Approval Letter
- Approval Certificate
China Company Taxpayer Types
There are altogether only two types of company taxpayer, i.e., “Small-scale VAT Taxpayer” and “General VAT Taxpayer.” The typological criteria are the annual turnover, which varies according to industry classification. It is generally recommended to start with the small-scale VAT Taxpayer for the first year and could upgrade to General VAT Taxpayer if the business expands.
Electronic Tax System Agreement (ETS Agreement)
To promote paperless tax collection and facilitate tax payment of company taxpayer, State Administration of Taxation (SAT), the Chinese Ministry of Finance (MOF) bureau and national banks jointly launch the Electronic Tax System, abbreviated as” ETS.” When the company’s business license and account opening permit issued, the ETS agreement should be arranged and stamped.
The tax-control disk is hardware commonly used for the record and transmits tax data between the company and the tax bureau. A tax-control CD must install specific software before invoice issue.
Business China provides total accounting, bookkeeping, financial statement, and tax compliance support services to manage your accounting services in China, while also offering accounting assistance that can save businesses a significant amount of time and money as well as the hassle of having to navigate the complete tax system in China.
Business China offers professional services such as:
- Accounting system set-up
- Advice on accounting software selection
- Annual audit assistance
- Annual inspection support
- Bookkeeping services
- Filing and submission of monthly and quarterly financial statement (PRC accounting standards)
- Finance Consulting
- Invoices management services
- Keeping of company invoice machine
- Maintenance of cash book
- Management of Bank Account Services
- Monthly individual income tax (“IIT”) filing
- Monthly VAT filing (Including calculation of tax burden)
- Purchase blank VAT invoice
- Tax Declaration
- Tax Registration
Some of our extended services include, but aren’t limited to the following:
- China Company Annual Report
- China Invoice Issue
- China VAT Refund
- China Social Insurance
- Business China is a reputed licensed accounting firm in China provide accounting services according to Chinese Accounting Standards (CAS).
- Our accountsfiling and other value-added service process strictly follow the national and local tax department’s requirement.
- We can offer you complete accounting and tax compliance support services to safeguard your China expansion.
- We can reduce startups’ operating costs while entrepreneurs can enjoy the service of a professional team.
- We can take care of your accounting obligations and provide quick access to experienced accountants.
- We offer a free consultation related to the accounting service.
Contact Us Today
To find out more about our services please feel free to contact us at +86-020-2917 9715 or send us an email with your queries to