Looking at the trend for the Chinese governmental changes on the administrative matter, the super-national treatment enjoyed by the foreign invested enterprise will be gradually cancelled, as well as the local tax preference policies. On the others side, the fact that the Chinese government is further simplifying the pre-approval procedures and will strengthen their post-administration will cause the local foreign invested companies to meet more potential punishment.
A. Common risk met by the enterprise(s)
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Administrative Affairs |
The potential trouble and punishment the company may meet |
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1 |
AIC management risk |
If the company does not make information publication in time or submit the wrong or fake information, the company will be put on the blacklist and its business operation will be affected. The person-in-charge will have the bad personal record. It will cause the restriction on his/her entry or exit of China or cannot take the other senior management positions. |
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2 |
Tax risk |
If the company does not make the completed tax report in time, or make it unlawfully, the company will have the punishment or is required to recover the missing tax or even to take the criminal liability. |
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3 |
Employment risk |
unlawfully enter into the employment agreement or hire the employees; do not make the company policy and the performance assessment policy; have the labor dispute and etc. |
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4 |
Commercial risk |
The qualification default, fake promotion, lack of sincerity, intentional cheat by the supplier, the agent and other cooperation company. |
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5 |
Risk for the related party transaction(s) |
Preparation of the contemporaneous documentation report. With the upgrading of the Chinese anti-tax regulations, the cross border companies should positively make the reaction on the risk management on the transfer pricing when doing business or investment in China. |
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6 |
Other risk for the operation |
Apply and renew for the special license at the local authority such as the environment, hygienic, fire protection, custom, safety administration, food and drug administration and the relevant inspection. If the company do not make it properly, it may meet the punishment, pushed to be close or even the license will be cancelled. |
B. The common measures we will suggest our client taking for the purpose of optimizing the tax and having the lawful tax preference
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Common Measures |
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1 |
Apply for the qualification as the high technology enterprise (preferential tax rate as 15% for Enterprise Income Tax) |
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2 |
Apply for the qualification as the advanced technology enterprise (the payable EIT is 15% and the training expenses could be deducted when to calculate the total payable income tax) |
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3 |
Apply for the exemption, deduction and refunding for the VAT/business tax |
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4 |
Apply for the special support fund (the policy is stable) |
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5 |
Additional deduction for the R&D expense(s) (EIT can be saved) |
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6 |
The asset loss for the enterprise can be deducted after the reporting to the competent tax authority and making the relevant procedures. It is not allowed to make pre tax deduction without making such report. |
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7 |
Tax plan, to design the reasonable way for tax payment and lawfully making the tax saving |
Based on our comprehensive foreign consulting service experience over fifteen years, Shanghai Dongjin will provide the professional service package involving in tax, research and human resources and help you to control the operation risk, save the cost and gain non-business income.
Shanghai Dongjin will provide the service package as follows.
Please contact our manager as below.
Ms. Jojo Hu
TEL: 0086-21-68868335 ext 324 / FAX: 0086-21-68868021
Email: jojohu@shanghaiinvest.com