Tax & Accounting 2018-10-23T10:09:22+00:00

Outsourced tax and accounting in China

Once a representative office or WFOE is set up and registered in China, it is necessary to maintain proper records and accounts in line with Chinese accounting laws and principles. Periodic reporting of accounts and tax to authorities needs to be made.

A full annual audit is also required of every company registered in China, including all forms of Foreign Invested Enterprise (FIE). For an FIE this is vital – as it is a pre-requisite for being able to start the repatriation of profit process.

This is no different to requirements in most countries – and accounting of course is nothing new! But without doubt, adapting to the rules and standards of tax and accounting in China is not straightforward.

Tax and Accounting with FDI China

Maintaining an independent tax and accounting service is an expensive option for any company, especially a smaller one, and many WFOEs and rep offices choose to outsource this to an experienced accountant services firm.

We provide a full range of accounting and tax services in China, as well as audit services. We can adapt our offering to suit the assistance you need. We can operate a fully outsourced accounting, tax and audit solution for you, or can just handle parts of this in collaboration with your internal functions.

Areas we can assist include the following:

  • Set up of initial accounting system and methodology for WFOE or rep office
  • Monthly preparation of company books in line with Chinese accounting standards
  • Monthly and annual preparation for tax filing with Chinese tax authorities
  • Preparing filing for Business tax, Individual Income tax and Corporate tax
  • Annual audit of financial statements
  • Consideration of appropriate double taxation treaties

Chinese Accounting Standards – similar but there are differences

The Chinese accounting system follows the Chinese Generally Accepted Accounting Principles (GAAP) framework, also known as Chinese Accounting Standards (CAS). These standards have evolved over time and are now quite in line with the globally recognised International Financial Reporting Standards (IFRS) and also US GAAP. There are however enough differences to present challenges.

To give one important example, CAS uses different valuation methods for fixed assets. IFRS allows valuation either by historical cost or by revaluation of assets, whereas CAS insists on the historical cost principle.

There are also regular discrepancies which occur between Chinese and International Standards not due to disagreement in treatment, but slow update processes. Changes released into one system often take some time to be adopted in the other.

The benefits of outsourcing tax treatment – Why wise FDI China?

There are several advantages to choosing outsourced tax and accounting services.

  • The complex areas of Chinese accounting standards and tax reporting are entrusted to a company which deeply understand them
  • With much less internal company time taken up on administration and reporting, resources are free to focus on real business tasks
  • Our accountants are always up to date with rules and regulations, and are well informed of current or future changes
  • Regular and accurate submissions to Chinese authorities are very important. There can be strict penalties for late or incorrect submission, right from the start of company operation.
  • We can advise on tax structures and planning, which can potentially lessen your tax burden

Tax and accounting reporting needs in China differ a great deal between companies. We suggest contacting us to discuss exactly what your company needs.

Your local compliance ensured by our local experts.

  • Banking service: payment set-up & processing and staff reimbursement
  • Tax & regulatory compliance
  • PRC financial statement
  • Inventory management
  • Accounting service: initial account system set-up, monthly bookeeping
  • Invoicing service
  • Annual audit assistance
  • Annual inspection

Want to know more about our services?

Call us at (+86) 21 5211 0026 or fill in the form below

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