China Business Insights: The new Chinese Annual Corporation Income Tax Return

The China Business Group prepared this alert based on information provided by the Grant Thornton International Ltd member firm in the People’s Republic of China, Grant Thornton China.

The State Administration of Taxation (SAT) for the People’s Republic of China (PRC) recently issued Notice [2014] No. 63 to revise the Chinese Annual Corporation Income Tax (CIT) return (new return). The new return was set to take effect on Jan. 1, 2015. According to the SAT, a revision was needed of the current corporate income tax package, introduced in 2008, to be consistent with new regulations as well as to meet the needs of the present business environment.

Changes on the new return are comprehensive. The following are highlights:
  • The new return introduces 25 new additional disclosure schedules or forms, giving the new return 41 schedules/forms total.
  • It requires disclosure of much more information and details. For example, if the entity is entitled to a tax benefit, it requires detailed disclosure of the tax benefit calculation and process.
  • It requires full disclosure of the differences between accounting and tax treatments.

The new return will apply to all entities, representative offices and branches that are established in the PRC, starting with returns for the fiscal calendar year 2014. The due date for filing the new return with the Chinese tax authorities is April or May of 2015, depending on the type of establishment. Foreign investors with a presence in the PRC are advised to understand what the new disclosure requirements are as well as any related implications, with a view toward ensuring a smooth 2014 Annual Corporation Income Tax return filing.

Contacts Please contact any of the following professionals for details:

Sandy Chu
Principal & National Leader — China Business Group
Grant Thornton LLP
757 Third Ave.
New York, N.Y. 10017
T +1 212.542.9970

Wilfred Chiu
Head of Tax Services — Beijing
Grant Thornton China
10th floor, Scitech Place, 22 Jianguomen Wai Ave.
Chaoyang District Beijing 100004, China
T + 86.10.8566.5828

Rose Zhou
Head of Tax Services — Shanghai
Grant Thornton China
45/F Raffles City, 268 Xizang Zhong Road
Shanghai 200001, China
T + 86.21.2322.0298

Enoch Chan
Tax Partner — Guangzhou
Grant Thornton China
Litong Squre 10th floor, Zhujiang East Road
Zhujiang New City, Tianhe District
Guangzhou 510623, China
T +86 20 3896 3388

Tracy Ying
Tax Director — Shenzhen
Grant Thornton China
Mid-area 14th floor, Great China International
Exchange Square, Jintian South Road
Futian District
Shenzhen 518048, China
T +86 755 3299 5844

This information is potentially subject to translation errors or omissions. It does not represent any type of tax advice whatsoever.

The information contained herein is general in nature and based on authorities that are subject to change. It is not intended and should not be construed as legal, accounting or tax advice or opinion provided by Grant Thornton China, Grant Thornton US or any Grant Thornton member firm to the recipient. This material may not be applicable to or suitable for specific circumstances or needs and may require consideration of the recipient’s facts and circumstances. Contact your local Grant Thornton member firm or other tax professionals prior to taking any action based upon this information. Grant Thornton member firms assume no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

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