How are tax returns filed in China?
Income tax on FIEs and foreign enterprises are levied on an annual basis and paid in advance in quarterly installments. Taxpayers should file their provisional income tax returns with the local tax authorities and pay the tax within 15 days as from the end of each quarter. They should file their annual income tax returns together with their final account statements within four months as from the end of each tax year, and make their final settlement within five months as from the end of the tax year. Any excess will be refunded and any deficiency will have to be paid.
For FIEs and foreign enterprises that have no establishment or venue in China but derive incomes from profits, interest, rentals, royalties and other incomes from sources within China, and for those that do not have establishments or venues in China but derive incomes that are not effectively connected with such establishments or venues, the income beneficiary should be the taxpayer and the payer should be the withholding agent. The tax should be withheld from the amount of each payment by the payer. The withholding agent should, within five days, turn the amount of taxes withheld on each payment over to the Sate Treasury and submit a withholding income tax return to the local tax authorities.