Notice regarding the inspection of the allocation of Corporate Income Tax (CIT)

Monday, 29 October 2012 20:01


On 24 September 2012, the SAT released Guoshuihan `2012` No. 445 (“Circular 445”) that launches the inspection of CIT allocation, in order to strengthen and standardize the CIT collection and administration of the enterprises subject to consolidated CIT filing for cross regional operations, identify and correct the inaccurate allocation of CIT reported by the head offices and the branches as well as understand the general status of these enterprises.    

The main points of Circular 445 are as follows:

  • TargetEnterprises with cross regional operations adopting consolidated CIT filing basis according to Guoshuifa `2008` No. 28 (“Circular 28”), i.e., the circular setting out the provisional measures on the collection and administration for the CIT allocation
  • ContentAllocation of CIT filed on a consolidated basis by enterprises with cross regional operations

Items of inspection



Self-inspection by enterprises and random inspection by the SAT


For self-inspection

Year 2011

For random inspection

Subject to further notice


For self-inspection

From 20 September to 20 November 2012

For random inspection

Subject to further notice

Deadline of reporting to the SAT by tax authorities at the local level


Our suggestion

Although the timeline and forms of random inspection have yet to be issued by the SAT, Circular 445 does indicate that the self-inspection cases with no CIT allocation or inaccurate CIT allocation should be reported to the SAT. We strongly recommend, therefore, that taxpayers who fall within the inspection scope should perform a self-inspection according to Circular 445 as soon as possible and take necessary remedial action to rectify any issues identified. A tax compliance health check by in-house resources or tax professionals can be a good starting point.

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