Thereare three parts of compliance requirement to an entity in Shenzhen.
Businesscertificates annual review
Bookkeepings
Taxfiling
It is time to prepare for an annualreview in compliance with regulations.
Per the official announcement launchedrecently from registration office, the requirements for a Wholly Owned ForeignEnterprise (‘WOFE’ hereafter) and a Foreign Representative Office (‘FRO’hereafter) is maintained the same as previous years.
For a WOFE, Financial Report Audit isnot compulsory but a FRO is.
http://www.szscjg.gov.cn/xxgk/qt/tzgg/qydj/201601/t20160104_3418067.htm
Two key points should be aware in theannouncement:-
1、Certificates Annual Review period
TheAnnual review period for 2015 is from Mar.1st to Jun.30th, 2016.
2、It says that an Audited Report issued by an Accounting Firm for Rep. Office is required. Audited information shall be inputted in the official website and uploaded to Accounting Association as a record.
Should we process accounting audit ortax audit? What differences are between these two?
An accounting audit is more focus onhow transactions are recorded in accounts and calculated properly per Chinaaccounting principles. This is usually required for annual certificates review.For a FRO, this is a compulsion instead of an option.
A taxation audit is more focus on howan entity's taxation liability is calculated correctly per local and currenttax laws as well as relevant regulations. This is linked to the governmenttaxation systems. Audited data will be uploaded to taxation systemsautomatically and becomes a strong reference to tax inspectors how well anentity is handling its tax liabilities and what issues such as taxpreference/grant are involved. If a company replies in more complex taxsituation or having tax preference, it would be better to process a tax auditto hedge a further tax risk. This is compulsory for an entity deregistration.Per current regulation the latest three years’ tax audits are required to starta deregistration process.
